One of the most intriguing stocks in the electric vehicle space is getting almost no credit for its next generation of cars, according to Morgan Stanley's Adam Jonas. The analyst said in a note to clients that luxury car brand Ferrari could be the best way to bet on clean-energy vehicles. "Our favorite EV stock has one of the world's strongest/most exotic brands, a 2-year waitlist, generates cash, and is developing EV capability in its skunk works. Oh ... and we think you get the EV business for less than $1bn," Jonas said. Jonas said electric vehicles should make up a significant part of Ferrari's portfolio by 2030 even though it appears to account for only a fractional amount of the share price. "We assume Ferrari BEV sales begin in FY25 and ramp to more than 30% of Ferrari unit volume by 2030. If we assume 24x EBITDA on our FY2030 ICE-derived earnings (roughly where stock is trading) ... we can justify ~98% of the company's enterprise value," he wrote. "Backing out the ICE value from the company's current share price suggests an EV business worth less than $1bn. The window won't be open for long." Morgan Stanley has an overweight rating and a price target of $265 per share for Ferrari. The target is 11.7% above where the stock closed on Friday. Shares rose 0.7% in premarket trading Monday. Jonas cited incoming Ferrari CEO Benedetto Vigna, who has a tech and science background, as one reason to be bullish and said investors should circle a spring 2022 investor day as a potential catalyst point. Ferrari is scheduled to report its third-quarter results Tuesday. — CNBC's Michael Bloom contributed to this report.
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One of the most intriguing stocks in the electric vehicle space is getting almost no credit for its next generation of cars, according to Morgan Stanley's Adam Jonas.