What’s ahead for Tesla stock in the new year is a big question for investors, coming on the heels of a disastrous 2022 and Chief Executive Elon Musk’s entanglement with Twitter.
Tesla (TSLA) has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021. The stock hit a bear market low of 101.84 on Jan 6. Since then, Tesla stock has roared about 87%.
Tesla reported mixed fourth-quarter results on Jan. 25, topping earnings estimates but missing on revenue. Nonetheless, the stock continued to rise as Musk said he was bullish about 2023.
In January, it was reported that Tesla sold 66,051 China-made vehicles. That’s a 10.4% jump compared with a year ago and up 18.4% vs. December. The sales numbers, released by the China Passenger Car Association, include exports. This marks the first monthly delivery numbers from Tesla’s Shanghai facility since the electric vehicle maker slashed China prices.
Analyst Views On TSLA Stock
“There was a lot riding on Tesla’s highly anticipated fourth-quarter results and 2023 guidance/commentary, with the Street anxiously focused on the demand outlook for 2023 along with margin trajectory,” Wedbush analyst Dan Ives said in a recent note to clients.
“While Tesla kept its 50% annual delivery growth target, Musk gave a hittable/beatable delivery target this year in the 38% growth range which we ultimately view as conservative with the China demand picture rebounding meaningfully,” Ives said. He maintained a rating of outperform on TSLA stock and rose his price target to 200, from 175, on “improved visibility and demand trajectory.”
Mizuho analyst Vijay Rakesh, in reaction to the Tesla earnings report, maintained his buy rating and price target of 250.
“Despite a growing number of competitors in the electric vehicle market,” Rakesh said, “we believe Tesla remains the global EV leader with key advantages in its vertical integration driving stronger margins as well as self-driving technology.”
RBC Capital Markets analyst Tom Narayan raised his price target on Tesla stock to 223, from 186, following the earnings report. He also maintained his rating of outperform.
Tesla Reveals Price Cuts Up To 20%
In mid-January, Tesla announced some significant price cuts in the U.S. and Europe. The cuts ranged from 6% to 20% for Model 3 and Model Y.
“TSLA is seeing strong demand response from recent price cuts and seeing the strongest orders year-to-date than ever in their history,” Narayan wrote in his note to clients.
“Competition is responding (Mach E), but we do wonder about the longer-term sustainability of competitor price cuts given more challenging profit margin,” he said.
In a recent note to clients, Baird analyst Ben Kallo called Tesla a “Best Idea” stock in 2023. He kept a buy rating, saying the company remains positioned to capitalize on growing demand for electric vehicles.
“We continue to believe TSLA is best positioned in the auto market as electric vehicles continue to take share of the total market,” he said.
Tesla is hosting its Analyst Day on March 1 at its so-called gigafactory in Austin, Texas.
The Long-Awaited Semi Hauler Unveiled
In early December, Tesla unveiled its long awaited Semi, an 18-wheel, long-haul electric freight truck, five years after it was first announced. Musk also has signaled there are plans to build out a charging network for long-haul trucks.
Musk did not specify how much the 18-wheeler costs. The Semi is capable of traveling an estimated 500 miles per charge. It can accelerate from zero to 60 in 20 seconds, Tesla says. The company expects to ramp production over the next year and aims to deliver 50,000 units in 2024.
“We are bullish on demand for the Semi as TSLA moves forward with ramping production of the truck to 50K units in 2024,” CFRA analyst Garrett Nelson said in a recent note. He expects a considerable appetite from large corporations seeking to reduce their carbon footprints.
Checkup On Tesla Stock
Even though Tesla has been rebounding a lot, it’s hard to identify a base and the right buy zone. The 200 price level seems important, acting as both resistance and support going back many months.
Even though Tesla has been rebounding a lot, it is hard to identify a base and the right buy zone. TSLA stock is trading above its 50-day moving average, which is an important step in its recovery. But the stock continues to trade below its 200-day average.
As a result, Tesla stock is not a buy. According to the IBD Stock Checkup tool, Tesla has a weak IBD Composite Rating of 68 out of 99. When choosing growth stocks with the biggest potential gains, based on the technical and fundamental investing criteria, focus on those with a Composite Rating of 90 or higher.
The stock also has a paltry Relative Strength Rating of 20 out of 99.
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