Morgan Stanley lowered its price target for Tesla and lowered its second-quarter delivery estimate based on concerns about second-quarter deliveries and costs.

"We expect [Tesla's] sales to decline in the second quarter, which will be offset by sales and price increases in the second quarter," Adam Jonas, a Morgan Stanley auto analyst, said in a note Wednesday afternoon.

The analyst estimated Tesla's second-quarter deliveriesThe number was lowered to 270,000 from 316,000, down about 14.6 percent.

Tesla sold 100,000 electric vehicles in April-May, Jonas said. "We believe Tesla will demonstrate its manufacturing prowess, helped by accelerated growth in Austin and Berlin (plants), and deliver approximately 170,000 to 175,000 units in June, slightly below the March 2022 estimate of 180,000 units."

Jonas, meanwhile, has a tesla price targetThe price was lowered to $1,200 per share from $1,300 previouslyThat's a drop of about 7.7%, and still represents a nearly 70% premium to Tesla's closing price of $708 on Wednesday.

To justify the lower price target, he explained that cost pressures are increasing at Tesla, with its weighted average cost of capital (WACC) increasing to 9% from 8.5% previously, and expected weak second-quarter results.

Separately, Jonas maintained his overweight rating on Tesla.

Tesla shares are down more than 30% this year as tech stocks have been pummeled by the Fed's accelerated rate hikes.