MORGAN STANLEY: Buy These 25 Non-Tesla Stocks To Cash In On The Electric-Car Revolution

Read The Full Article On: Businessinsider

Tesla is off to the races, but a lot of other companies that stand to benefit from rising demand for electric cars are still at the starting line.

A team of Morgan Stanley analysts predicts a wave of enthusiasm in the still-young industry, and writes that Tesla’s battery-powered vehicle manufacturing will become profitable this year as its new factory in Shanghai ramps up.

They say that milestone — and proof of concept at scale — will change the spending patterns for makers of semiconductors, batteries, chemicals, and those involved in mining, energy, and making charging stations. 

“There are a multitude of second derivatives players that are interdependent in the EV ecosystem and touch many industries across the globe,” the team wrote.

Here’s how they describe the effects for original equipment manufacturers as they put more money into battery electric vehicles:

“If Tesla can indeed prove that EVs can be profitable at scale, we believe this would remove one of the key impediments preventing legacy OEMs from shifting capacity to BEVs, potentially unleashing further waves of investment into the BEV production ecosystem and its supporting infrastructure.”

They add that that will start an evolution that makes electric vehicle components more profitable for those companies. And as sales climb, cost fall, and profitability improves, they thinks the effects will be dramatic.

Today, Morgan Stanley estimates that sales penetration for electric vehicles is only at 2% worldwide. But they think that will jump to 11% in five years, 24% by 2030, and 70% in 2040.

Electric vehicle sales forecast
Morgan Stanley’s Adam Jonas says sales of electric vehicles will skyrocket over the next 20 years and tracks the implications for companies that make chemicals, batteries, semiconductors, and other items. 

They say their best idea for taking advantage of that shift is “through large cap, credible battery companies with a proven track record such as CATL, Samsung SDI, Panasonic and LG Chem.”

But they’ve found more than 20 other companies that could be major beneficiaries.

Listed below are the 25 stocks they expect to have the most potential as investors embrace growing demand for electric vehicles and improving infrastructure for them. Almost all of them are based in Asia, and they may be less familiar to US investors.

The stocks are arranged from lowest to highest based on how much they would have to rise to reach Morgan Stanley’s current price targets.

25. Contemporary Amperex Technology

Screen Shot 2020 02 14 at 4.34.16 PM

Ticker300750.SZ

Sector: Batteries

Region: Asia-Pacific

Upside to price target: -16%

Source: Morgan Stanley Research

24. Enel

Enel

TickerEnel.MI

Sector: Electric utilities

Region: Europe

Upside to price target: -8%

Source: Morgan Stanley Research

23. Samsung SDI

Samsung SDI

Ticker006400.KS

Sector: Batteries

Region: Asia-Pacific

Upside to price target: -5%

Source: Morgan Stanley Research

22. NXP Semiconductors

NXP Semiconductors

TickerNXPI

Sector: Semiconductors

Region: USA

Upside to price target: 6%

Source: Morgan Stanley Research

21. Iljin Materials 

Iljin

Ticker020150.KS

Sector: Chemicals and materials

Region: Asia-Pacific

Upside to price target: 7%

Source: Morgan Stanley Research

20. Posco Chemical

Posco Chemical

Ticker003670.KS

Sector: Chemicals/Materials

Region: Asia-Pacific

Upside to price target: 7%

Source: Morgan Stanley Research

19. Zhejiang Sanhua

Zhejiang Sanhau

Ticker002050.SZ

Sector: Autos

Region: Asia-Pacific

Upside to price target: 8%

Source: Morgan Stanley Research

18. LG Chemicals

LG Chemical

Ticker051910.KS

Sector: Batteries

Region: Asia-Pacific

Upside to price target: 9%

Source: Morgan Stanley Research

17. Glencore

Glencore

TickerGLEN.L

Sector: Metals and mining

Region: Europe

Upside to price target: 12%

Source: Morgan Stanley Research

16. STMicroelectronics

STMicroelectronics

TickerSTM.PA

Sector: Semiconductors

Region: Europe

Upside to price target: 12%

Source: Morgan Stanley Research

15. Freeport-McMoRan

Freeport-McMoRan

TickerFCX

Sector: Metals and mining

Region: USA

Upside to price target: 13%

Source: Morgan Stanley Research

14. Panasonic

Panasonic

Ticker6572.T

Sector: Batteries

Region: Asia-Pacific

Upside to price target: 13%

Source: Morgan Stanley Research

13. Quanta Computer

Qanta Computer

Ticker2382.TW

Sector: Technology and hardware

Region: Asia-Pacific

Upside to price target: 13%

Source: Morgan Stanley Research

12. Delta Electronics

Delta Electronics

Ticker2308.TW

Sector: Technology and hardware

Region: Asia-Pacific

Upside to price target: 18%

Source: Morgan Stanley Research

11. Zeon

Zeon

Ticker4205.T

Sector: Chemicals/Materials

Region: Asia-Pacific

Upside to price target: 19%

Source: Morgan Stanley Research

10. Motherson Sumi Systems

Motherson

TickerMOSS.NS

Sector: Autos

Region: India

Upside to price target: 19%

Source: Morgan Stanley Research

9. Tripod Technology

Tripod Tech

Ticker3044.TW

Sector: Technology and hardware

Region: Asia-Pacific

Upside to price target: 23%

Source: Morgan Stanley Research

8. Petronet LNG

Petronet

TickerPLNG.NS

Sector: Energy

Region: India

Upside to price target: 25%

Source: Morgan Stanley Research

7. Hota Industrial Manufacturing

Hota Industrial

Ticker1536.TW

Sector: Autos

Region: Asia-Pacific

Upside to price target: 26%

Source: Morgan Stanley Research

6. Chroma ATE

Chroma Ate

Ticker2360.TW

Sector: Technology and hardware

Region: Asia-Pacific

Upside to price target: 29%

Source: Morgan Stanley Research

5. NTPC

NTPC

TickerNTPC.NS

Sector: Electric utilities

Region: India

Upside to price target: 31%

Source: Morgan Stanley Research

4. S&T Motiv

S&T Motiv

Ticker064960.KS

Sector: Autos

Region: Asia-Pacific

Upside to price target: 39%

Source: Morgan Stanley Research

3. Komatsu

Komatsu

Ticker6301.T

Sector: Machinery

Region: Asia-Pacific

Upside to price target: 46%

Source: Morgan Stanley Research

2. NARI Technology

NARI Technology

Ticker600406.SS

Sector: Electric utilities

Region: Asia-Pacific

Upside to price target: 52%

Source: Morgan Stanley Research

1. New Fortress Energy

New Fortress

TickerNFE

Sector: Energy

Region: USA

Upside to price target: 55%

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