Tesla (TSLA) gets strong Wall Street backing, stopping the stock’s free fall

Tesla (TSLA) is getting help from Wall Street with several analysts pointing to the stock now being at a buying opportunity level, which is helping to stop the bleeding.

As we reported on Monday, Tesla’s (TSLA) stock is taking a beating, and investors are asking the board to help with a share buyback program.

Investors started a petition to ask Tesla’s board to approve a share buyback program, and it now has over 5,000 signatures. There’s a chance that it could happen since Tesla CEO Elon Musk said last month that the board was considering a $5 to $10 billion share buyback program.

This would only be a small help, though, considering that Tesla has erased nearly $500 billion in market capitalization over the last three months.

But until the board decides on a buyback program, Tesla investors have to rely on another ally to help the stock: Wall Street. With the drop in stock price, several Wall Street analysts have issued notes to clients signaling that the stock is entering buying opportunity levels.

Adam Jonas, a Morgan Stanley analyst covering Tesla, sees almost 100% upside to Tesla’s stock at this price. He wrote in a new note to clients:

In a slowing economic environment, we believe Tesla’s ‘gap to competition’ can potentially widen, particularly as EV prices pivot from inflationary to deflationary. With respect to the IRA (Inflation Reduction Act) we believe Tesla is by far the best positioned OEM in terms of potential eligibility for consumer tax credits (up to $7,500/unit) and for Section 45x production credits (up to $45/KWh). The current price offers approximately 100% potential upside to our $330 price target which is the highest upside to target we have seen from Tesla in over 5 years.

Citi analyst Itay Michaeli also changed his tune on Tesla following the stock price decrease.

Top comment by morrisg

Liked by 6 people

Tesla doesn't need to spend $5 - $10B on stock buybacks. That money would be much better spent on vertically integrating the battery chemical supply chain. Over 90% of battery chemicals are refined and concentrated in China today. Tesla needs to be independent from that, at the very least for vehicles assembled in the USA in order to qualify for IRA tax credits to consumers.

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Michaeli upgraded Citi’s rating on Tesla’s stock to neutral, as he noted it now trades for an attractive near-term risk/reward profile.

Dan Ives from Wedbush Securities also came out with a new note on Tesla today with expectations for a strong Q4 with what he believes could be as many as 450,000 deliveries, which would be a major new record for Tesla.

Ives maintains a $250 price target on Tesla’s stock – representing a significant upside.

Tesla’s stock (TSLA) is up more than 5% this morning following the notes from the three Wall Street analysts.

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