Tesla (Tesla Inc.) market value in two months evaporated nearly $ 300 billion, but now, a growing number of Wall Street analysts have begun to say that the company's shares have fallen enough to advise investors not to miss this round of buying opportunities.
As of Wednesday's U.S. stock close, Tesla was trading at $183.20, up nearly 8 percent, the biggest one-day gain since July.
Morgan Stanley (Morgan Stanley) analyst Adam Jonas said earlier that Tesla is approaching his “bear market target price” of $ 150, which provides investors with the opportunity to buy at a lower price. Citi analysts also raised the stock's rating to neutral from sell, saying the stock's more than 50 percent decline this year “offsets short-term risk/reward.
Jonas wrote in a report that Tesla is the only electric car maker in Morgan Stanley's survey that is profitable through car sales, despite challenges such as slowing demand and price cuts in China.
The analyst reiterated his $330 price target. He also highlighted the potential for Tesla to benefit from consumer tax credits in the United States.
No coincidence. Citi analyst Itay Michaeli also upgraded the stock on Wednesday, giving him a $176 price target, one of the lowest on Wall Street. The analyst said he has become more optimistic because Tesla's plunge means some of the stock's overly optimistic expectations have now been repriced.
Tesla's shares have plunged this year due to rising raw material costs, production and sales problems and customer budget pressures. Recent distractions from the company's CEO Musk, who is focused on turning around Twitter, have also dampened market sentiment.
Jonas said that to stop the decline in the stock price, it is necessary to end the disruption caused by Twitter. He wrote, “There has to be some form of sentiment 'meltdown mechanism' around the tweets to calm investor concerns about Tesla.”
Despite all the challenges Tesla has faced this year, Wall Street has remained largely optimistic. Most Tesla analysts have a Buy or Neutral rating on the stock, although the stock is currently 57 percent away from the average analyst target price.
In addition, Tesla's plunge this year has reduced the stock's expected price-to-earnings ratio from more than 200 times in early 2021 to 31 times now.
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