The Tesla stock correction may be over. Its course could follow that of the Nasdaq index or that of the S&P500. In any case, this is the situation presented by the financial analysts of American banks such as Citi and Morgan Stanley, at a time when a changeover is looming and the target price objectives are raised. The drop over the past three months has caused the manufacturer’s share price to plunge by more than 50%. Now it would be time to buy. Moreover, the 300 billion dollars of the manufacturer’s capitalization which evaporated on the stock market could be quickly found.
Faced with the announcement, negotiations resumed even more vigorously with significant volumes. Tesla’s share price on Wall Street gained 7.8% to $183.20. In post-close trading, the uptrend continued and Tesla stock hit $184.80. The manufacturer has picked up some colors and its capitalization once again exceeds $575 billion.
Most analysts updated their estimates on Tesla on Wednesday, November 23. An echo of the notable bounce we just mentioned, but also a symbol as Tesla moved closer to its $150 support. For many, it is an important psychological threshold, which sends us back to October 2020, when the price of Tesla stock exploded. Today, its price would still trade at more than 31 times forward earnings, but this is still well below the 200 times higher levels at the start of 2021.
At Morgan Stanley, analyst Adam Jonas has set his target at $330. In which case, Tesla would therefore have to experience a significant increase of 57% to regain such a level. Tesla has lost it since last April. The first time the company reached this level was in October 2021. At that time Tesla was heading for its all-time high at over $405 – a price that here takes into account the split from the beginning of August when the shares divided by three to make prices more accessible to all.
Much more severe, Citi analyst Itay Michaeli is aiming much lower while his target is only $176. That being said, it still remains superior to what it presaged before. Itay Michaeli explaining that he thought that Tesla’s correction, on the stock market as well as in its sales performance, would allow the brand to review its objectives more responsibly. According to Bloomberg, this analyst would however be the only one to estimate such a low target, and that the majority to date would be of the opinion of switching to buy mode.
What Influences Tesla Stock
Tesla stock is influenced by many criteria. Like all, the macro-economic environment and the end of the stock market rally initiated a sustained decline in the share price. Inflation has weighed on the profitability of sales and households are delaying their purchases in the face of uncertainty. At the same time, many see Elon Musk’s takeover of Twitter as another reason many investors dropped Tesla, fearing that the billionaire and entrepreneur would sideline the automaker.
Elon Musk could actually nominate someone else for the role of CEO of Tesla while his mind is busy, already between Twitter, SpaceX and Neuralink. But another hypothesis opposes these explanations. For some, Elon Musk would have used his endless work with Twitter to divert investors’ attention to Tesla, which was then going through a difficult period. Difficulties in production, delivery, the delay in the development of autonomous driving FSD… all these elements could have had more serious consequences if Elon Musk had not made so much noise with Twitter.
And now, why a return of optimism? Already, the return of Elon Musk in strategic announcements. This morning, he announced for example that the beta of autonomous driving would now be extended to all drivers in the United States who checked the option and that a new factory in Asia could see the light of day. Then, from a purely economic point of view, Tesla is one of the few automakers today to be profitable on its cars. In the list of firms analyzed by Morgan Stanley, Tesla is even the only one.