Tesla shares rose 30% last week. Here’s where Wall Street sees it going next
It’s been a game of two halves for Tesla over recent months. Just last week, the electric-vehicle maker’s stock leaped by more than 30% following its earnings announcement . This year so far, Tesla shares are up by around 35%. These moves come on the back of a couple of developments: last week the company reported fourth-quarter earnings and revenue that topped analyst projections; and earlier in January, it cut prices in the U.S. and Europe in a bid to boost demand. It follows a bleak 2022 when Tesla shares slumped over 35% in December and around 65% over the year. Here’s what Wall Street analysts say about where they see the stock going next. Has Tesla bottomed? Morgan Stanley analysts led by Adam Jonas reiterated Tesla as a “top pick” with a $220 price target — or 23% potential upside — in a note on Jan. 26. However, he cautioned that “stability of the share price seems to be the least likely outcome here.” The bank said Tesla could test “new lows” in the first half of the year, before exceeding its $220 price target within 12 months. Its bear case is a $70 price target, while its bull case is $390. “We see FY23 as a year where auto price inflation turns to deflation compounded by continued macro and geopolitical uncertainty,” the analysts wrote. “With Tesla, there’s also the ever present background risk of ‘company specific’ idiosyncratic and sentiment-related factors that can also swing this historically volatile name in both directions.” Goldman Sachs in a Thursday note said that Tesla’s fourth-quarter earnings pointed to further gains for the EV maker. “We continue to believe that the company is well positioned for long term growth given its leadership position both in terms of cost structure and as a full solution provider in clean mobility,” the bank said. Its price target on the stock is $200. Garrett Nelson, senior equity analyst at CFRA Research, predicts a “strong rebound” for Tesla shares in 2023, calling its risk/reward “highly compelling” at current levels. He told CNBC’s “Squawk Box Asia” on Thursday that the combination of price cuts and federal EV credits will drive a near-term demand resurgence. He also described its balance sheet as “robust.” “We continue to view TSLA’s long-term upside potential as significant following the stock’s steep decline over the past few months,” Nelson said in notes emailed to CNBC, adding that its valuation is attractive given that it is “trading near its cheapest multiples” in years. Wedbush analyst Dan Ives in a Thursday note said that Elon Musk “embracing the spider web relationship between Twitter and Tesla” will draw a “mixed reaction” from investors. “That said, with Twitter noise starting to slowly dissipate and the demand story roaring out of the gates in 2023 despite a darker macro, we walk away from this call incrementally more bullish on Tesla into 2023,” he wrote. He raised the price target from $175 to $200. Not all analysts were bullish, however. Some said the stock could underperform , adding that the company’s automotive gross margins, which was the lowest figure in the last five quarters, spelled trouble ahead. “The quarter won’t settle all recent debates since Q4 margins did exit softer, FCF [free cash flow] missed, and strong order trends will need to sustain beyond the initial uplift. To that, the 2023 delivery guide will likely also draw some debate,” Citi’s Itay Michaeli wrote Wednesday. He has a neutral rating on the stock and a $146 price target. Tesla shares ended Monday at $166.66. — CNBC’s Michael Bloom and Sarah Min contributed to this report.
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