The disruption of production in Q2 for Tesla has led to the disenchantment of analysts who have been perpetually bullish on the name.
And yesterday, Morgan Stanley joined the discussion, noting that Tesla's second quarter could wind up being a "substantial miss", as a result of Covid, supply disruptions and costs associated with ramping up the company's Berlin and Austin factories.
Analyst Adam Jonas said that "Tesla was due for a reset" and asked whether or not new investors/Tesla owners would "enter the arena" at $500.
"Historically investors tend to sell low and buy high on this one," Jonas wrote, before stating that he thought Q1 would be the company's strongest quarter of the year.
He raised the issue of margins and costs for the rest of 2022, saying Tesla needs to "confront" the supply chain disruptions currently taking place.
"We believe Tesla's more 'gritty' capabilities in terms of manufacturing, material sourcing, supply chain, and infrastructure will drive the next leg of growth to the story," Jonas wrote.
He concluded: "Investors have long struggled to find a ‘good’ time to buy Tesla shares. We believe the China supply wobble that could potentially drive a substantial 2Q delivery miss provides a window of opportunity before potentially seeing 100%-type sequential recovery in Tesla China production later in the year."
Recall, hours ago Dan Ives called the situation in China "an epic disaster" for Tesla's coming June quarter and said he expects to see "modest delivery softness".
Ives also said he is expecting a "slower growth trajectory" in China into the second half of the year and called the headwinds out of Asia "hard to ignore".
He also commented that the ongoing Twitter drama "may be a distraction" for Musk at a time when his attention should be focused on dealing with Tesla's issues.