Tesla’s stock is way down on the year, but some think the automaker could have a sizable upside in the future. Many analysts view Tesla’s low stock price as a chance to see serious value growth, including investment firm Morgan Stanley.
Morgan Stanley called Tesla one of its Top Picks for 2023 earlier this month, highlighting increasing competition and the company’s dominant position amidst a bear market, as detailed in a report from Teslarati. The firm also maintained a price target of $330, while some other analysts have dropped their own targets on Tesla’s stock.
“While we see 2023 as a challenging year for the EV market categorically, we believe Tesla’s gap to competition can widen,” wrote Morgan Stanley in a note to clients.
The news opposes recent moves by fellow investing firm Goldman Sachs, which recently cut Tesla’s stock price target from $305 to $235 on account of Elon Musk’s Twitter affairs. Still, many consider Tesla’s financial details sound, from its high earnings and profitability to its low debt compared to the competition.
However, some analysts predict that tech stocks could still fall, causing a level of caution among investors. Another factor affecting stocks across the board is the precarious nature of the current bear market, as the U.S. Federal Reserve has pushed interest rates upward to combat inflation.
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Tesla named Top Pick at Morgan Stanley. Video: CNBC / YouTube
The Morgan Stanley position is categorized by Teslarati as cautious optimism, and it comes ahead of Tesla’s plans to begin producing the Cybertruck in 2023, and on the heels of the company’s first Semi deliveries to PepsiCo. Tesla also plans to announce another factory around the end of the year, according to Musk, which recent reports allege will be unveiled in Mexico in early 2023.
Additionally, Tesla is still ramping up production at its new Texas and Berlin-Brandenburg Gigafactories, the latter of which also added an extra shift to its schedule this month. With new products and growth on the horizon, it could be a stock worth watching in the new year.
In any case, there’s no way to predict what Tesla’s stock could do in the coming months. Several analysts and Musk himself have even called the stock inflated at times, and bearish investor expectations have become common on Wall Street in recent months. However, those who already hold the stock and plan to wait out the recession could be in for long-term opportunity, while other bulls point out the low buy-in price for Tesla’s shares.
Originally posted on EVANNEX. By Peter McGuthrie.
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