Tesla will have to raise more money in 2019, says Morgan Stanley (TSLA)

• Last week, Tesla announced another profitable quarter and said it would make a profit for "every quarter ahead."
• The electric car maker also said it had enough cash to make its largest debt repayment in March 2019, the largest in its history.
• Morgan Stanley believes that Tesla will have to raise $ 2.5 billion of equity in the third quarter of 2019 and that its free cash flow for the full year will be negative.
• Watch Tesla's trade live.

Tesla is not self-sufficient enough to finance his growth ambitions, says Morgan Stanley.

Last week, after announcing a profitable quarter for the first time, he made two consecutive profitable quarters, according to Tesla. It would be profitable "for every quarter". The electric car maker also said it has enough cash to pay $ 920 million worth of convertible bonds, with the deadline set for March 2019, which is the largest repayment of debt of its history.

While Tesla is confident about its profitability and ability to generate cash, Morgan Stanley says the company will still need more capital.

"We expect the free cash flow of Tesla 1Q19 to be negative $ 600 million, due to a sequential decline in earnings and working capital leaks," said Adam Jonas, an badyst at Morgan Stanley. He has advanced his forecast of a $ 2.5 billion capital increase in the third quarter of the year.

Jonas estimates that free cash flow for the year 2019 of Tesla is negative $ 246 million, against $ 809 million previously. He thus proceeded with the adjustment due to a significantly lower forecast of capital expenditures for that year.

Tesla had $ 3.69 billion in cash and cash equivalents as of December 31, according to its new balance sheet. The company said its cash was up $ 1.45 billion in the second half of 2018.

Jonas pointed out that Tesla's unstable leadership group increased the company's risk of self-financing. The electric car maker announced when it released its results last week that CFO Deepak Ahuja was going to retire from the company for the second time.

"We do not think investors will badume that the company is fully autonomous without a longer period of execution," Jonas said.

He reiterated his "equal weight" rating and price target of $ 283, 11% lower than the stock market on Tuesday. He added that Tesla is "fully valued".

Tesla was up 5% so far this year.

Now read: