UPDATE: Morgan Stanley Upgrades Sonic Automotive Inc

In a note published Monday, Morgan Stanley analyst Ravi Shanker upgraded shares of Sonic Automotive Inc (NYSE: SAH) from Underweight to Overweight and raised the price target from $22 to $30.

In the note, Shanker asked if Sonic isthe Tesla Motors Inc (NASDAQ: TSLA) of dealers; what he meant was - is Sonic going to disrupt the automotive dealer model in the same way Tesla has disrupted automotive OEMs.

Shanker's team had the chance to meet with Sonic's management and witness the One Sonic One Experience (OSOE) first hand; Shanker noted he feels the risk-reward is "good enough to own" and believes investor concerns are overdone.

Through the OSOE, Shanker said Sonic is bringing the process of buying a car more inline with that of a normal retail experience rather than purchasing a home. The key, in Shanker's opinion, is how much of a premium consumers are willing to for a "high-quality transaction experience."

To address investor's main concern of Sonic, Shanker noted the company's pricing model is actually "quite flexible" leaving less room to be undercut by competitors than previously thought.