Tesla’s market value has evaporated nearly $300 billion in two months. More and more analysts say that the stock price of Tesla has fallen enough.
Due to the rising cost of raw materials, production and sales problems in China and customer budget pressure, Tesla’s share price fell sharply this year.
Morgan Stanley analyst Adam Jonas said on Wednesday that Tesla was approaching his “bearish target price” of $150, which provided investors with the opportunity to bargain.
Jonas said that although Tesla faced challenges such as slowing demand and lowering prices in China, it was the only electric vehicle manufacturer investigated by Morgan Stanley to make profits by selling cars. The analyst reiterated his target price of $330. He also stressed that Tesla may benefit from the US consumer tax credit.
Jonas said that if we want to stop the decline of stock prices, we must end the interference caused by Twitter. He wrote, “Around the Twitter event, there must be some form of emotional ‘circuit breaker mechanism’ to calm investors’ concerns about Tesla.”
Citigroup analyst Itay Michaeli raised Tesla’s rating from “sell” to “neutral”, saying that the stock’s decline of more than 50% this year “offset short-term risk/return”.
Michaeli also gave Tesla a target price of $176, which is one of the lowest target prices on Wall Street. The analyst said that he became more optimistic, because Tesla’s sharp fall meant that some overly optimistic expectations of the stock, including sales, had now been excluded from pricing.
Despite the challenges Tesla faces this year, Wall Street remains basically optimistic. Most Tesla analysts rated the stock as “buy” or equivalent, and the stock needs to rise 80% to reach the median analyst target price. This year’s sharp decline has reduced Tesla’s expected P/E ratio from more than 200 times at the beginning of 2021 to 31 times.
