BUZZ - Brokerage Perspective: Tesla's cash reserves continue to increase, but its growth prospects face more questions

October 22 - ** Tesla TSLA.O on Wednesday (link) lowered its annual capital expenditure forecast from more than $25 billion to about $20 billion and achieved a surprising positive free cash flow in the third quarter—after its investments in artificial intelligence and robotics fell far short of expectations

** The stock dropped 3.7% in pre-market trading, to $371.83

Momentum enhanced

** StoneX (rating "Buy", target price: $475) stated that the lowered capital expenditure outlook appears to be only a temporary pause, since spending should increase again as the autonomous taxi fleet, Optimus, solar, computing business, and semiconductor fab scale up

** JPMorgan ("Neutral", target price: $430) stated that capital expenditure remains central to market discussion, and that any delay might ease short-term cash burn but also means postponing investments essential for realizing long-term opportunities

** Morgan Stanley ("Equal-weight", target price: $410) said: "Tesla’s third quarter results provided encouraging evidence for scaling ride-hailing services and the rollout of FSD (Full Self-Driving), while fundamental improvements in the auto and energy business further reinforce the profit base"

** Daiwa Capital Markets ("Neutral") pointed out that advances in autonomous driving technology appear to be driving robust FSD adoption, helping Tesla increase market share as EV demand recovers and mitigating sales risk

(For the convenience of non-English speakers, Reuters has automated this report’s translation into several other languages. Automated translation may contain errors or lack needed context; Reuters does not guarantee the accuracy of the automated translation and provides it only for readers’ convenience. Reuters accepts no responsibility for any damages or losses resulting from the use of automated translation.)