With You’re here (TSLA) higher after earnings and following bullish comments from CEO Elon Musk on demand, a number of analysts have revised price targets for the electric vehicle giant.
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Last week, Tesla stock soared 33%, topping its 50-day moving average for the first time since September. Since hitting a bear market low on Jan. 6 at 101.84, TSLA shares have broken out for a 75% gain. On Monday, Berenberg analyst Adrian Yanoshik upgraded Tesla from “Buy” to “Hold” and lowered the price target to 200 from 255. That was about 14% above the stock traded Monday.
Yanoshik viewed Tesla’s decision to cut vehicle prices as an investment in growth. The analyst also expects Tesla to maintain its gross margin and EBIT lead over traditional automakers.
Berenberg’s decision to upgrade Tesla comes after three analysts raised price targets for Tesla stock late last week. Wedbush analyst Daniel Ives, a longtime Tesla bull, raised the company’s price target on Tesla to 200 from 175, while maintaining an “outperform” rating on TSLA shares.
Cowen analyst Jeffrey Osborne raised the price target to 140 from the previous target of 122. Osborne retained a “Market Perform” rating on Tesla stock. Wells Fargo analyst Colin Langan also raised the company’s price target on Tesla to 150 from 130 previously.
Ahead of Tesla earnings, a slew of analysts had cut price targets. Tesla stock rose 2.3% to 173.80 during Monday’s market trading.
Tesla stock jumps on earnings
Late Wednesday, Tesla’s earnings edged ahead of analysts’ views, while revenue was roughly in line. However, TSLA shares soared as Musk turned bullish on demand following price cuts and forecast production of up to 2 million vehicles.
Meanwhile, the Securities and Exchange Commission (SEC) is currently investigating Musk’s role in crafting Tesla’s self-driving claims, Bloomberg reported on Saturday.
Musk said on the earnings call on Wednesday that Tesla has rolled out the Full Self Driving (FSD) beta for city streets to about 400,000 customers in North America.
The electric vehicle giant is currently about 100 million miles away from FSD, not including freeway driving, according to Musk.
“We wouldn’t have released the FSD beta if the security stats weren’t great,” Musk said.
Tesla Price Cuts
Tesla slashed prices for Model 3 and Model Y in China, with the base Model 3 down more than 13% to $33,570. Weekly China electric vehicle registration data is expected to be released Tuesday for Tesla and other automakers. However, Tesla’s Shanghai factory was closed last week for the Chinese New Year holiday.
The electric vehicle giant also announced price cuts in the United States and Europe. This will make more models eligible for $7,500 tax incentives under the Inflation Reduction Act (IRA).
The electric vehicle giant has cut prices for the US Model 3 by 6 to 14 percent, depending on the version. A standard Model 3 RWD has been reduced from $3,000 to $43,990. With the IRA tax credit applied to the vehicle, consumers who meet the income limits would pay $36,240.
The Performance Model 3 version was reduced by $9,000 to $53,990, falling below the $55,000 limit for tax credits. Meanwhile, Tesla’s base Model Y has been discounted by $13,000, or nearly 20%, to $52,990, also below the tax credit limit. The Performance variant of this vehicle has been reduced to $56,990, also down $13,000.
Tesla action: Ford responds
Musk told investors on Wednesday that so far in January, Tesla had “logged in the largest year-to-date orders than ever in our history.”
On Monday, Bloomberg reported that Ford (F) responds to Tesla with price cuts averaging $4,500 on its electric Mustang Mach-E.
This will bring the price of a base Mach-E model down to $45,995, down $900, while the most expensive GT Extended Range version drops $5,900 to start at $63,995. The California Route 1 extended-range version is down almost 9% to start at $57,995.
TSLA shares rank third in the automaker industry group. Tesla stock has a composite rating of 58 out of 99. The stock has a relative strength rating of 8, an IBD Stock Checkup proprietary gauge for stock price performance. The EPS rating is 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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