Before the Move: TuSimple could jump on CFIUS update, 'Driver Out' test

Morgan Stanley believes that a positive resolution, or even updates, on either or both could potentially drive as much as 50% upside for TuSimple shares
Shares of TuSimple (TSP) are in the spotlight on Tuesday after the stock was named a catalyst driven idea at Morgan Stanley. Analyst Ravi Shanker is expecting "imminent news" from the company on two potential catalysts, namely TuSimple's "Driver Out" test and an update on the Committee on Foreign Investment in the United States, or CFIUS, inquiry regarding the 2017 investment into the company from Sina (SINA).

CATALYST DRIVEN IDEA: Morgan Stanley analyst Ravi Shanker told investors in a research note that he expects "imminent news" from TuSimple on two potential catalysts, namely the company's "Driver Out" test and an update on the CFIUS inquiry regarding the 2017 investment into TuSimple from Sina as part of its Series B fund raising. Shanker expects a final resolution for both these catalysts within the next three months or "potentially as soon as in the next few days/weeks." The analyst named the stock as a catalyst driven idea given the view that a positive resolution, or even updates, on either or both could potentially drive as much as about 50% upside.

Shanker has identified the "Driver Out" test as a key milestone for TuSimple on the "path to demonstrating the commercial viability of autonomous driving not just for the company, but perhaps for the industry." This test will involve running a Class 8 truck on public highways with regular traffic for an extended period, without a human inside the truck. The analyst noted that management seemed "extremely confident and in very good spirits" regarding this catalyst during his recent field trip and demo run. Shanker has an Overweight rating and $75 price target on TuSimple shares.
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