© Reuters Buy weakness in Tesla (TSLA) as EV stock could rally 130% in 2023 – analyst
By Senad Karaahmetovic
Tesla (NASDAQ:) stock has continued to move lower in pre-market Wednesday with shares of the electric vehicle (EV) maker down nearly 4% to trade at around $105 a share (as of 05:15 ET/10:15 GMT).
Tesla stock price dropped 11.41% yesterday to close at $109.10 – the lowest level since August 2020. Yesterday’s plunge in the EV maker’s shares also marks the biggest single-day drop since late April this year.
“The reality is that after a Cinderella story demand environment since 2018 Tesla is facing some serious macro and company specific EV competitive headwinds into 2023 that are starting to emerge both in the US and China,” Wedbush analysts said in a client note.
They described the selloff in Tesla stock as “eye popping” as investors’ concerns “are growing around what the softening demand picture looks like for 2023 given the dark macro clouds and increasing domestic EV competition.”
For Baird analysts, the Tesla stock selloff represents a buying opportunity. The analysts recently named TSLA a “Best Idea for 2023” as they believe the EV maker is “best positioned to benefit from IRA.”
Moreover, they are “optimistic” that sales of shares by CEO Elon Musk have ended through 2023.
“We believe this portion of the overhang from Twitter may finally be removed for 2023,” the analysts told Baird’s clients in today’s note.
Still, they cut the price target on Tesla stock to $252 per share (from $316), which implies an upside potential of more than 130% relative to yesterday’s closing price. The price target cut reflects lowered estimates on the back of Musk’s recent comments and the “potential for weakening of demand.”
However, Baird analysts remain upbeat about the outlook for Tesla stock as far as 2023 is concerned.
“Gigafactories in Austin and Berlin should lift margins by an increasing amount q/q in 2023 as production ramps. We are encouraged by reports of production in Berlin reaching milestones of 3K vehicles per week and production targets of 75K in Q123.”
“We continue to believe TSLA is the best positioned EV maker in both the near and long term,” they concluded.
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