Dj China's Trade Surplus Tops $1 Trillion, Underscoring Its Export Dominance

By Jules Rimmer

Andrew Percoco sees 'choppy environment' ahead for Tesla stock

Tesla shares have rallied by a third in the last three months, outperforming the market, but Morgan Stanley see no upside ahead.

Tesla may be a global leader in electric vehicles, manufacturing, real world AI and renewable energy and therefore warrant a premium valuation, but for Morgan Stanley there's a fair price for everything and this is now all fully discounted.

The bank's new analyst on the stock, Andrew Percoco, has downgraded his recommendation on Tesla (TSLA) from overweight to equal-weight, while upping the price target to $425 from $410 per share.

Tesla shares are currently trading at $454, roughly 7% above the revised Morgan Stanley target. In the last three months, Tesla has outperformed the wider market and rallied by roughly a third but in 2025 so far, has advanced just 12%.

Percoco, who took over coverage from Adam Jonas and uses a sum-of-the-parts (SOTP) model to analyze the company, finds valuation metrics no longer justify a buy rating, and predicts a "choppy trading environment" for Tesla shares through 2026.

In his report published Dec. 7, Percoco acknowledges that Tesla is much more than just an auto manufacturer, but he sees downside to estimates for this central part of its business. Morgan Stanley's estimates for electric vehicle sales in 2026 is 13% below the consensus among Wall Street analysts.

Despite these lower volume forecasts, Percoco remains optimistic about Tesla's 'Full Self-Driving' product launch, describing it as "a real game-changer" and "a significant competitive advantage" over rivals.

Tesla Total Vehicle Sales (units). 2025 has been a difficult year with public relations suffering from Elon Musk's controversial political profile.

While revamping his SOTP model for Tesla, Percoco has integrated forecasts for its humanoid division, Optimus. Tesla is a leader in this technology, owing to its scale, vertical integration, access to data, compute and energy and its position in real-world AI. Percoco attaches a value of $60 per share to Optimus, while also incorporating greater upside to its robotaxi business -Tesla Mobility.

While appreciating the worth of Tesla's non-auto operations, Percoco thinks the catalysts in these areas are broadly priced in so his recommendation is to wait for a better entry point into the stock.

Considering the valuations, Percoco reckons that Tesla's price to earnings before interest, tax, depreciation and amortization ratio is quite demanding on 30 times the consensus for 2030, and 48 times Morgan Stanley's assessment.

The analyst provides both a bullish and a bearish alternative scenario. In the more optimistic layout, Tesla manages the EV downturn and scales both Robotaxi and Optimus, and Percoco sees shares rising 89% to $860.

In the more pessimistic schema, Tesla succumbs to competition and margin pressure, the market disregards Optimus in valuations and Robotaxi has slower growth expected. In this setup, Percoco thinks $145 is possible, 70% below current levels.

Of the fifty or so analysts contributing recommendations to FactSet, only a quarter roughly rate Tesla sell or underweight, while buys and holds account for the remainder.

-Jules Rimmer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

FORM 8.5 (EPT/RI)

PUBLIC DEALING DISCLOSURE BY AN EXEMPT PRINCIPAL TRADER WITH RECOGNISED INTERMEDIARY STATUS DEALING IN A CLIENT-SERVING CAPACITY

Rule 8.5 of the Takeover Code (the "Code")

1.         KEY INFORMATION

2.         DEALINGS BY THE EXEMPT PRINCIPAL TRADER

Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 2(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

The currency of all prices and other monetary amounts should be stated.

(a)        Purchases and sales

(b)        Cash-settled derivative transactions

(c)        Stock-settled derivative transactions (including options)

(i)         Writing, selling, purchasing or varying

(ii)        Exercise

(d)        Other dealings (including subscribing for new securities)

3.         OTHER INFORMATION

(a)        Indemnity and other dealing arrangements

• Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the exempt principal trader making the disclosure and any party to the offer or any person acting in concert with a party to the offer:

  Irrevocable commitments and letters of intent should not be included.  If there are no such agreements, arrangements or understandings, state "none"

• NONE

(b)        Agreements, arrangements or understandings relating to options or derivatives

• Details of any agreement, arrangement or understanding, formal or informal, between the exempt principal trader making the disclosure and any other person relating to:

  (i)  the voting rights of any relevant securities under any option; or

  (ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

  If there are no such agreements, arrangements or understandings, state "none"

• NONE

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service. 

The Panel's Market Surveillance Unit is available for consultation in relation to the Code's dealing disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel's website at www.thetakeoverpanel.org.uk.

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FORM 8.5 (EPT/NON-RI)

PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY AN

EXEMPT PRINCIPAL TRADER WITHOUT RECOGNISED INTERMEDIARY ("RI") STATUS (OR WHERE RI STATUS IS NOT APPLICABLE)

Rule 8.5 of the Takeover Code (the "Code")

1.         KEY INFORMATION

2.         POSITIONS OF THE EXEMPT PRINCIPAL TRADER

If there are positions or rights to subscribe to disclose in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 2(a) or (b) (as appropriate) for each additional class of relevant security.

(a)        Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates following the dealing (if any)

All interests and all short positions should be disclosed.

Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).

(b)        Rights to subscribe for new securities (including directors' and other employee options)

3.         DEALINGS (IF ANY) BY THE EXEMPT PRINCIPAL TRADER

Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 3(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

The currency of all prices and other monetary amounts should be stated.

(a)        Purchases and sales

(b)        Cash-settled derivative transactions

(c)        Stock-settled derivative transactions (including options)

(i)         Writing, selling, purchasing or varying

(ii)        Exercise

(d)        Other dealings (including subscribing for new securities)

4.         OTHER INFORMATION

(a)        Indemnity and other dealing arrangements

• Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the exempt principal trader making the disclosure and any party to the offer or any person acting in concert with a party to the offer:

  Irrevocable commitments and letters of intent should not be included.  If there are no such agreements, arrangements or understandings, state "none"

• NONE

(b)        Agreements, arrangements or understandings relating to options or derivatives

• Details of any agreement, arrangement or understanding, formal or informal, between the exempt principal trader making the disclosure and any other person relating to:

  (i)  the voting rights of any relevant securities under any option; or

  (ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

  If there are no such agreements, arrangements or understandings, state "none"

• NONE

(c)        Attachments

• Is a Supplemental Form 8 (Open Positions) attached?

• YES

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

The Panel's Market Surveillance Unit is available for consultation in relation to the Code's disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel's website at www.thetakeoverpanel.org.uk.

SUPPLEMENTAL FORM 8 (OPEN POSITIONS)

DETAILS OF OPEN STOCK-SETTLED DERIVATIVE (INCLUDING OPTION) POSITIONS, AGREEMENTS TO PURCHASE OR SELL ETC.

Note 5(i) on Rule 8 of the Takeover Code (the "Code")

1.         KEY INFORMATION

2.         STOCK-SETTLED DERIVATIVES (INCLUDING OPTIONS)

3.         AGREEMENTS TO PURCHASE OR SELL ETC.

• Full details should be given so that the nature of the interest or position                                             can be fully understood:

• NONE

It is not necessary to provide details on a Supplemental Form (Open Positions) with regard to cash-settled derivatives.

The currency of all prices and other monetary amounts should be stated.

The Panel's Market Surveillance Unit is available for consultation in relation to the Code's disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel's website at www.thetakeoverpanel.org.uk.

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FORM 8.5 (EPT/NON-RI)

PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY AN

EXEMPT PRINCIPAL TRADER WITHOUT RECOGNISED INTERMEDIARY ("RI") STATUS (OR WHERE RI STATUS IS NOT APPLICABLE)

Rule 8.5 of the Takeover Code (the "Code")

1.         KEY INFORMATION

2.         POSITIONS OF THE EXEMPT PRINCIPAL TRADER

If there are positions or rights to subscribe to disclose in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 2(a) or (b) (as appropriate) for each additional class of relevant security.

(a)        Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates following the dealing (if any)

All interests and all short positions should be disclosed.

Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).

(b)        Rights to subscribe for new securities (including directors' and other employee options)

3.         DEALINGS (IF ANY) BY THE EXEMPT PRINCIPAL TRADER

Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 3(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

The currency of all prices and other monetary amounts should be stated.

(a)        Purchases and sales

(b)        Cash-settled derivative transactions

(c)        Stock-settled derivative transactions (including options)

(i)         Writing, selling, purchasing or varying

(ii)        Exercise

(d)        Other dealings (including subscribing for new securities)

4.         OTHER INFORMATION

(a)        Indemnity and other dealing arrangements

• Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the exempt principal trader making the disclosure and any party to the offer or any person acting in concert with a party to the offer:

  Irrevocable commitments and letters of intent should not be included.  If there are no such agreements, arrangements or understandings, state "none"

• NONE

(b)        Agreements, arrangements or understandings relating to options or derivatives

• Details of any agreement, arrangement or understanding, formal or informal, between the exempt principal trader making the disclosure and any other person relating to:

  (i)  the voting rights of any relevant securities under any option; or

  (ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

  If there are no such agreements, arrangements or understandings, state "none"

• NONE

(c)        Attachments

• Is a Supplemental Form 8 (Open Positions) attached?

• NO

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

The Panel's Market Surveillance Unit is available for consultation in relation to the Code's disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel's website at www.thetakeoverpanel.org.uk.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.  END  FEOUWVBRVUUURRA

A weaker rupee, coupled with ongoing disruptions and widespread flight cancellations at IndiGo, has prompted analysts to sharply cut earnings forecasts for InterGlobe Aviation. Since late November, IndiGo has cancelled hundreds of flights, with the situation deteriorating further over the past four days. Airports nationwide have seen chaotic scenes as anxious passengers scrambled for information and travel plans went into disarray.

Industry experts say the turmoil comes at the worst possible time. “This is supposed to be the best period. December and March are the strongest quarters,” one aviation analyst said, warning that continued cancellations could shave 5–7 percent off IndiGo’s topline on a quarterly basis.

The strain is already visible in the company’s numbers. InterGlobe Aviation reported a net loss of Rs 2,582.10 crore in the September quarter of FY26, widening from Rs 986.7 crore a year earlier, largely due to currency movements linked to dollar-denominated future obligations. Lease costs soared more than tenfold in the quarter as the rupee weakened against the dollar. The airline said a 1.7 percent depreciation in the rupee triggered a forex loss of Rs 2,892 crore, compared with Rs 240.6 crore in the same period last year.

Citi expects IndiGo’s operations to normalise over the next month as the airline rolls out corrective measures. However, it cautions that the combination of a weakening rupee and rising aviation turbine fuel prices could further erode profitability in what is traditionally a strong third quarter. Fuel accounted for 27 percent of IndiGo’s total expenditure in the September quarter, and ATF prices have risen 10 percent since early September. Citi also notes that IndiGo’s vast and complex network makes it more susceptible to cascading disruptions.

Morgan Stanley shares similar concerns. The brokerage warns that the rupee’s depreciation will inflate fuel and maintenance bills, adding to the burden of rising jet fuel prices. It says India’s new pilot fatigue management rules have pushed IndiGo’s operations into turmoil, revealing the challenges of adapting to stricter safety regulations. IndiGo has acknowledged that inadequate preparation for the revised roster norms — phased in through 2024 and fully implemented from November 1 — contributed to this week’s disruptions. “Lack of proper planning ultimately led to disruptions this week,” the airline admitted.

With the new rules in place, Morgan Stanley estimates that pilot salaries — already accounting for nearly half of total staff costs — are set to climb further. The brokerage has cut its FY26 and FY28 earnings-per-share estimates by 20 percent each and trimmed EBITDA forecasts by 1–4 percent, noting that improved yields will only partly offset higher staff expenses. Even so, it adds that these cost pressures are not unique to IndiGo; tight industry-wide capacity may push airfares higher, offering a partial cushion.

Market experts caution the earnings impact may persist. “The current debacle and chaos at IndiGo is going to impact earnings,” said Kranthi Bathini of WealthMills Securities. “They also need to win back customer trust — that is crucial in the short to medium term.” Bathini added that rupee depreciation presents a “double whammy” for the airline. “By and large, the current cancellations and inoperation are going to hit revenues this quarter,” he said, advising investors to avoid the stock in the near term as it remains in a downtrend.

IndiGo’s management, meanwhile, has been trying to strengthen its natural hedge against currency swings. In the September quarter, CEO Pieter Elbers said the airline was accelerating its “internationalisation” strategy by expanding into routes that generate revenue in euros, pounds or dollars — a buffer against rupee volatility. “This provides us with a natural hedge against currency fluctuations,” Elbers said.

Revenue in the September quarter fell 10 percent sequentially to Rs 18,555 crore. International operations helped offset a slowdown in domestic traffic during a seasonally weak period marked by weather disruptions and geopolitical tensions. Excluding the impact of forex movements, IndiGo reported an operational profit of Rs 104 crore, compared with Rs 2,347 crore in the June quarter and a loss of Rs 754 crore a year earlier.

Elbers noted that there was a small positive from hedging against the dollar but said losses arising from currency fluctuations and dollar-denominated lease obligations pushed the airline from an operating profit into a net loss. IndiGo has now revised its capacity guidance to the “mid-teens,” an improvement over the “double-digit” growth it had projected earlier. Optimised capacity deployment, he said, has already enabled a 10 percent revenue increase and an operational profit of Rs 104 crore, excluding the impact of currency movement, compared to a loss last year.