Tesla's stock is 'caught in a flywheel of concerns,' says Morgan Stanley analyst who just cut his price target for the 4th time this year

Reuters

• Tesla shares fell by as much as 1.2% on Tuesday after Morgan Stanley slashed its price target.
• It's the firm's fourth price-target cut this year and this month.
• Tesla shares "appear caught in a flywheel of concerns" including demand and access to capital, auto analyst and longtime Tesla observer Adam Jonas wrote in a note to clients.
• Watch Tesla trade live.

Morgan Stanley is growing increasingly negative on Tesla shares.

"TSLA shares appear caught in a flywheel of concerns around demand & access to capital driving the share price lower, exacerbating sentiment around demand & access to capital," analyst Adam Jonas wrote in a note to clients on Tuesday.

He added: "Stopping this negative cycle is a priority for the company and its stakeholders."

Jonas lowered his price target from $240 a share to $230, implying a 4% drop from current levels. He has now cut his price target four times this year and twice this month. Jonas started 2019 with a $291 target.

Read more: Morgan Stanley slashes its Tesla target for the 3rd time this year

The analyst's report comes on the heels of a particularly hectic week for Tesla shareholders, even by the volatile stock's standards.

Last Wednesday, the Elon Musk-led electric-car maker reported a wider-than-expected first-quarter loss. By Friday, shares closed at their lowest level in two years, slicing below key technical support at $250.

Vocal Tesla bull Ross Gerber, who is the cofounder, president, and CEO of Gerber Kawasaki, noted the technical behavior in a Friday tweet.

"Unfortunately Tesla blew through resistance today and capitulation selling happened," he wrote. "We were forced to reduce risk throughout the month in the stock for certain investors. We have sell rules at the firm that were triggered for certain clients. $TSLA."

Wall Street is generally bearish on Tesla shares. Of analysts polled by Bloomberg, 15 say "sell," 12 say "buy," and nine are neutral.

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