A longtime Tesla bull tones down his excitement and warns there are some 'risks bubbling below the surface'

  • Longtime Tesla bull Adam Jonas says his thinking of Tesla's addressable market has "evolved."
  • Morgan Stanley cites Amazon's desire to reduce freight costs for its shift of thought. 
  • Shares of Tesla are down 1.5% in early trading Friday. 

Morgan Stanley automotive analyst Adam Jonas, historically one of Tesla’s biggest bulls on Wall Street, says his thinking has "evolved" when it comes to the company’s total addressable market.

"We previously thought that if one were to look out longer-term, there would be a greater likelihood that Tesla could justify a market valuation far above (and possibly even a multiple of) its current capitalization," Jonas said in a note to clients Friday.

Elon Musk through the years:

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Elon Musk through the years
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. REUTERS/Aaron P. Bernstein
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. REUTERS/Aaron P. Bernstein
Tesla Motors CEO Elon Musk takes the stage to speak at the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
FILE PHOTO: Tesla Chief Executive, Elon Musk enters the lobby of Trump Tower in Manhattan, New York, U.S., January 6, 2017. REUTERS/Shannon Stapleton/File Photo
Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at SolarCity's Inside Energy Summit in Manhattan, New York October 2, 2015. SolarCity on Friday said it had built a solar panel that is the most efficient in the industry at transforming sunlight into electricity. REUTERS/Rashid Umar Abbasi
Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California October 9, 2014. Tesla Motors Inc on Thursday took its first step toward automated driving, unveiling features that will allow its electric sedan to park itself and sense dangerous situations. The company also said it will roll out an all-wheel drive option of the Model S sedan that can go from zero to 60 miles per hour in 3.2 seconds yet doesn't compromise the vehicle's efficiency. Musk said "D" stands for "dual motor," meaning Tesla's all-wheel drive vehicle will have a motor at either end of the chassis to increase control. REUTERS/Lucy Nicholson (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS HEADSHOT)
Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California October 9, 2014. Tesla Motors Inc on Thursday took its first step toward automated driving, unveiling features that will allow its electric sedan to park itself and sense dangerous situations. The company also said it will roll out an all-wheel drive option of the Model S sedan that can go from zero to 60 miles per hour in 3.2 seconds yet doesn't compromise the vehicle's efficiency. Musk said "D" stands for "dual motor," meaning Tesla's all-wheel drive vehicle will have a motor at either end of the chassis to increase control. REUTERS/Lucy Nicholson (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS HEADSHOT)
Tesla Motors Inc Chief Executive Elon Musk speaks during a news conference in Tokyo September 8, 2014. Musk said on Monday that he would not be surprised if there was a significant deal with Toyota Motor Corp in the next two to three years, though there were no definitive plans. REUTERS/Toru Hanai (JAPAN - Tags: BUSINESS TRANSPORT)
Elon Musk, CEO of Tesla Motors, waves during a news conference to mark the company's delivery of the first batch of electric cars to Chinese customers in Beijing April 22, 2014. REUTERS/Stringer (CHINA - Tags: TRANSPORT BUSINESS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA
CEO & CTO of SpaceX and CEO & Chief Product Architect of Tesla Motors Elon Musk receives The President's Award for Exploration and Technology at the 110th Explorers Club Annual Dinner at the Waldorf Astoria in New York March 15, 2014. The club, which promotes the scientific exploration of land, sea, air and space featured catering for the event by chef and exotic creator Gene Rurka. Chef Rurka prepared a variety of dishes featuring an array of insects, wildlife, animal body parts and invasive species. REUTERS/Andrew Kelly (UNITED STATES - Tags: SOCIETY BUSINESS SCIENCE TECHNOLOGY FOOD)
Tesla Motors CEO Elon Musk talks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan, January 13, 2015. REUTERS/Rebecca Cook (UNITED STATES - Tags: TRANSPORT BUSINESS)
SpaceX CEO Elon Musk speaks after unveiling the Dragon V2 spacecraft in Hawthorne, California May 29, 2014. Space Exploration Technologies, or SpaceX, on Thursday unveiled an upgraded passenger version of the Dragon cargo ship NASA buys for resupply runs to the International Space Station. REUTERS/Mario Anzuoni (UNITED STATES - Tags: POLITICS TRANSPORT SCIENCE TECHNOLOGY SOCIETY)
Tesla Motors CEO Elon Musk poses at the premiere of the documentary "Revenge of the Electric Car" in Los Angeles October 21, 2011. REUTERS/Mario Anzuoni (UNITED STATES - Tags: ENTERTAINMENT TRANSPORT BUSINESS PORTRAIT)
Elon Musk, Chief Executive of Tesla Motors and SpaceX, attends the Reuters Global Technology Summit in San Francisco June 18, 2013. REUTERS/Stephen Lam (UNITED STATES - Tags: BUSINESS SCIENCE TECHNOLOGY TRANSPORT)
Tesla Chief Executive Officer Elon Musk leaves a press event at his company's factory in Fremont, California, June 22, 2012. Tesla began delivering its Model S electric sedan to customers on June 22. REUTERS/Noah Berger (UNITED STATES - Tags: TRANSPORT SCIENCE TECHNOLOGY BUSINESS)
SpaceX founder Elon Musk pauses at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper
SpaceX founder Elon Musk listens at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper
Tesla Motors CEO Elon Musk waves as he leaves the stage after speaking at the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
89th Academy Awards - Oscars Vanity Fair Party - Beverly Hills, California, U.S. - 26/02/17 ? Elon Musk. REUTERS/Danny Moloshok
Tesla Motors CEO Elon Musk speaks during the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, arrives at the SpaceX Hyperloop Pod Competition II in Hawthorne, California, U.S., August 27, 2017. REUTERS/Mike Blake
Tesla Chief Executive Elon Musk attends a forum on startups in Hong Kong, China January 26, 2016. REUTERS/Bobby Yip
Tesla CEO Elon Musk speaks about new Autopilot features during a Tesla event in Palo Alto, California October 14, 2015. REUTERS/Beck Diefenbach
Tesla founder Elon Musk arrives for the the annual Allen and Co. media conference Sun Valley, Idaho July 7, 2015. REUTERS/Mike Blake
AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Chris Saucedo/Getty Images for SXSW)
AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW)
AUSTIN, TEXAS - MARCH 10: Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention Center on March 10, 2018 in Austin, Texas. (Photo by FilmMagic/FilmMagic for HBO)
AUSTIN, TX - MARCH 10: Elon Musk, CEO of SpaceX speaks onstage during SXSW at Austin Convention Center on March 10, 2018 in Austin, Texas. (Photo by Amy E. Price/Getty Images for SXSW)
BERLIN, GERMANY - NOVEMBER 08: Elon Musk attends the 'Goldenes Lenkrad' Award at Axel Springer Haus on November 8, 2016 in Berlin, Germany. (Photo by Tristar Media/WireImage)
Tesla Motors CEO Elon Musk speaks at a press conference during the 67th International Astronautical Congress in Guadalajara, Mexico on September 27, 2016. / AFP / HECTOR GUERRERO (Photo credit should read HECTOR GUERRERO/AFP/Getty Images)
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"Our thinking has since evolved on this debate, and we see long-term opportunities offset by risks bubbling below the surface, primarily due to factors outside of Tesla’s control."

Among the risks to Tesla’s valuation, Jonas lists Amazon, which relies heavily on shipping and recently announced an entry into the business that could compete directly with UPS and FedEx.

"Look no further than Amazon’s "fulfillment" and "shipping" expense line items in its income statement," Jonas said. "In aggregate, fulfillment and shipping was $46 billion in 2017 … We're in no position to say whether Amazon would be a partner or potential competitor to Tesla in the area of transport, trucking, and logistics, but we point out the scale that large e-commerce players can bring."

Steep competition in autonomous vehicles could also hurt Tesla, Jonas said. 

"Where we have substantially higher conviction on the Tesla story is our longer-term thesis that the company will face greater levels of competition than the market anticipate in the domains of electric vehicles, autonomous vehicles, and shared mobility," he wrote. 

The company also announced late Thursday that chief accountant Eric Branderiz was leaving the company "for personal reasons."

Jonas has been a Tesla bull for a while, with a $379 price target since last year. But recently, he warned that 2018 could be marked with steep volatility as the company faces a number of headwinds.

Jonas maintained his "equal weight/cautious" rating for the stock with a price target of $379  — 15% above Thursday’s closing price. Wall Street's consensus target is $329 — in line with where shares are currently trading.

Shares of Tesla are down roughly 1.5% ahead of Friday’s opening bell.

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