After losing nearly $300 billion in market value in two months, a growing chorus of Tesla Inc. analysts are saying the share-price decline has gone far enough.
Morgan Stanley analyst Adam Jonas said on Wednesday that Tesla is approaching his “bear case” price target of $150, presenting an opportunity for investors to buy at a bargain price. Citi analysts today upgraded the shares to neutral from sell, saying that a more than 50% slump this year “has balanced out the near-term risk/reward.”
Despite challenges including decelerating demand and price cuts in China, Tesla is the only electric vehicle maker covered by Morgan Stanley that generates a profit on the sale of its cars, Jonas wrote in a note. The analyst -- who also highlighted Tesla’s potential to benefit from consumer tax credits in the US -- reiterated his $330 price target.
Shares rose 1.5% in premarket trading to $172.40. The stock has slumped this year amid rising raw materials costs, issues with production and sales in China and pressure on customer budgets. Latterly, Chief Executive Officer Elon Musk’s focus on turning around Twitter Inc. has also hit sentiment, with $300 billion wiped off Tesla’s market cap in the past two months, according to Bloomberg calculations.
