Morgan Stanley issued an extremely bullish report on Tesla (TSLA) this morning which sent shorts scrambling for cover and the stock soaring out of consolidation, up nearly 20% as I write this.  The firm upgraded TSLA to Overweight and set a base price target of $70 which is nearly triple what the stock was trading at before the report was issued.

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Here are some highlights of the report.  See Benzinga for more details.

– convinced electric cars will make up a significant minority of global light vehicle sales in the medium term and majority long term

– doesn’t see electric cars competing with internal combustion in a major way for at least 10 yrs

– Tesla has opportunity to establish itself as American’s 4th auto maker aided by high gas prices and government incentives

– Morgan Stanley sees a best case scenario price target of $135 but it’s not clear to me on what the time horizon is for that because they base it on long term targets for EV penetration (7% by 2020, 21% by 2025)

Technically, today’s surge changes the game for shares of TSLA from neutrality (as the stock quietly based) to bullish.  I’d be looking to add a position on any pull back (preferably 5-10% off today’s highs).