Tesla Stock Could Hit $109, Analyst Says

Shares of Tesla Motors have farther to climb, Adam Jonas of Morgan Stanley said Monday.

"We think the stock's worth $109 on a 15-year DCF," he said, or "discounted cash flow."

"Granted, in terms of where the stock could trade over a few days or a few weeks, there's a lot of heated trading activity. So, it would be nice to see the thing settle down from a trading perspective, but we think the value of the equity is $109. And on a risk-adjusted return, we think that upside is quite favorable compared to the average auto stock we cover."

Tesla stock traded at $92.54 at 1:03 p.m. ET, down 5 percent.

On CNBC's "Fast Money," Jonas also noted that the auto industry faced stiff headwinds from the decline of the Japanese yen, North American capacity and pricing for used vehicles.

(Watch Video: Ty's Tesla Hits Unexpected Bump)

Automobile-sector stocks to avoid included Goodyear, Harman, Tenneco, Hertz andAvis, according to Jonas.

Jonas said that Tesla's regulatory tax credits were "equal to a large percentages of their cap x and R&D spending, which helps really de-risk the story, so we think there's still life left, although recognizing that the stock price can't go at the pace it's been going much longer."

Jonas also said that he wasn't overly concerned about the fluctuation in Tesla's stock price.

(Read More: Duking it Out Over Tesla Motors)

"Volatility works both ways," he said. "I think, frankly, if we had the stock sell a bit more, we'd have a little more balance in the market. You can't have it just a one-way street, so I think we'd have an easier time explaining the story and bringing in incremental investors with the stock lower."

His other top picks included Ford, TRW, Delphi and Johnson Controls.

(Read More: Jim Cramer Wowed by Tesla Test Drive)

Trader disclosure: On June 3, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long FB; Mike Murphy is long F; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long AAPL; Joe Terranova is long SPLK; Joe Terranova is long GLD; Joe Terranova is long TBT; Joe Terranova is long SWN; Joe Terranova is long GOOG JUNE 870 PUTS; Joe Terranova is long GS JUNE 165 PUTS; Joe Terranova is short MINI S&P FUTURES; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB ; Stephanie Link is long EBAY; Stephanie Link is long F.