Morgan Stanley has replaced Tesla as its firm-wide top pick with Ferrari . Analyst Adam Jonas increased Ferrari’s price target by $30 to $310, implying the stock could rally 14.2% over the next year. Jonas said his optimism around Ferrari stems mainly from its defensiveness. “We believe RACE is the best positioned company in our coverage in a highly uncertain macroeconomic and geopolitical tape,” he said in a note to clients Monday. “In addition to its strong fundamentals, we believe RACE has levers to pull for both growth or downside protection, within a wide dispersion of macro outcomes.” He also said the stock “avoids much of the EV hype and EV risk” and has an attractive risk-reward ratio. Jonas said the company has a predictable business model with a moat from scarcity around its performance and luxury-centric brand. He said this focus can make it hard for competitors to replicate Ferrari’s business model overnight and allows the company to “manage their own destiny.” Still, he said the company has sound long-term plans including an underestimated opportunity in the electric vehicle market. Jonas said the company can shift away from its traditional internal combustion engine — which has been used since its inception — with losing the DNA of the car. He said the company’s electric vehicle offering could be as high demand as its traditional cars, with the expectation that ICE and EV will nearly hit parity within the company in 2032. Nearly half of the increase to Ferrari’s price target stems from foreign exchange, as the dollar’s recent fall against the euro helped the Italy-based company, Jonas said. Ferrari gained 0.3% in the premarket. It has gained 27.6% this year, part of a rebound among automakers that is fueling part of Jonas’ argument for being increasingly cautious. He pointed to signs of unaffordability and auto credit pressure as other reasons for concern. Tesla shed 0.1% in premarket trading. The stock has surged 60.5% this year, making up ground after dropping 65% in 2022. To be sure, Jonas still rates Tesla as overweight and has a $220 price target on the stock, implying upside of 11.2% from Friday’s close. RACE TSLA YTD mountain Ferrari and Tesla — CNBC’s Michael Bloom contributed to this report.