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Morgan Stanley Cautious on Two Stock Giants: Tesla Motors Inc (TSLA), Walt Disney Co (DIS)


Morgan Stanley analysts separately explain why they are cautious on electric car giant Tesla Motors Inc (NASDAQ:TSLA) and entertainment giant Walt Disney Co (NYSE:DIS), as more questions arise about Tesla Autopilot and vehicle safety, and Disney’s media networks segment is currently under pressure. Let’s take a closer look.

Tesla Motors Inc

Recent crashes of Tesla cars that were in autopilot have provoked a federal investigation and raised consumer and investor questions over the benefits and risks of advanced ADAS technology and the responsibilities of the OEM.

Morgan Stanley analyst Adam Jonas believes that as the size of Tesla’s fleet grows, the incidence of traffic fatalities will rise materially. He noted, “While Tesla’s vehicles are newer and achieve a higher crash rating than the average car, we merely point out that even a safety record of 2x the average car on US roads would imply a handful of fatal crashes each year. According to the same data from NHTSA (released July 1,2016) there were 35,200 fatalities for the full year 2015 (+7.7% YoY) for an average of more than 96 fatalities per day or slightly more than 1 death every 15 minutes on average.”

In terms of marketing, the analyst believes that the name...