The stock price of Tesla has fallen as a result of the pessimistic projections of a well-known Wall Street analyst. On Wednesday, Citi analyst Itay Michaeli downgraded Tesla from “sell” to “neutral” due to what he sees as an exaggeration of Tesla’s market value decrease of $600 billion from its November 2021 highs.
To his earlier valuation-based justifications, the analyst added new ones. In a statement to customers, Michaels said that despite the decline seen so far this year, the company sees a balanced risk/reward in the near term.
Michaeli thinks that some previously baked-in assumptions that we disagreed with are now available given the multiple’s decline to 30 times 2023 estimated earnings per share (EPS).
In spite of the fact that our most recent model update led to a reduction in our short-term EPS forecasts, our Q4-2024E EPS forecast is still expected to be higher than the consensus (2). We anticipate that Tesla’s long-term competitive position will improve even in the event of a hard landing, and [the Inflation Reduction Act] may even further bolster this position. It’s likely that worries about the state of the economy as a whole and the strength of competition will persist even as production increases.
Previously, Michael had predicted the price would be $141.33, but now he thinks it will be $176. As of Wednesday morning, Tesla’s share price was up by 1 percent.
According to Polestar’s CEO, “We are on target to produce 50,000 automobiles this year.” Keep scrolling up to see what it looked like from the previous camera angle. After reporting an unexpected $600 billion loss, Tesla’s share price rose.
We will draw the following conclusions in the following pages: Tesla’s stock price has dropped as a result of a prominent Wall Street analyst’s pessimistic predictions.
Citi analyst Itay Michaeli downgraded Tesla’s rating from “sell” to “neutral” on Wednesday because he believes the $600 billion drop in Tesla’s market value from its November 2021 highs is overstated.
In a statement to customers, Michaels said that despite the decline seen so far this year, the company sees a balanced risk/reward in the near term. To his earlier valuation-based justifications, the analyst added new ones.
Michaeli thinks that some previously baked-in assumptions that we disagreed with are now available given the multiple’s decline to 30 times 2023 estimated earnings per share (EPS).
Our most recent model update has resulted in a reduction in our short-term EPS forecasts, but our projections for Q4-2024E are still ahead of the consensus (2). We have previously stated that even in the case of a hard landing, we anticipate Tesla’s competitive position to improve, and the Inflation Reduction Act may even strengthen it.
Previously, Michael had predicted the price would be $141.33, but now he thinks it will be $176. As of Wednesday morning, Tesla’s share price was up by 1 percent.
Morgan Stanley analyst Adam Jonas agreed with Michaeli, adding to the lingering worries that Tesla Inc. CEO Elon Musk is too preoccupied with Twitter to manage the company competently.
A “sentiment circuit breaker” is needed in the Twitter situation, Jonas recently wrote, in order to “quiet” investors’ worries about Tesla. Tesla stock has decreased 20% in value compared to the S&P 500 index’s gain of 6.6% over the same time period.
Until early January, when Tesla is expected to begin shipping vehicles, and until a clearer picture of the company’s delivery and production plans for 2023 is available, investors will be “extremely anxious,” according to Wedbush analyst Dan Ives. They are “the ones that have been punched again and again by the Musk Twitter shenanigans,” as he put it.
A longtime supporter of Tesla, Ives recently took the company’s stock off of Wedbush’s “best ideas” list.
