- Tesla stock has had a rocky start to 2023, even after a terrible year when it cratered 65%.
- The electric vehicle maker is dealing with falling demand in China and elsewhere, as well as Elon Musk’s Twitter saga.
- Here’s what Paul Krugman, Jeremy Siegel, Cathie Wood and others think is happening – and what it means for stocks.
Tesla stock is at a started badly this year after enduring a terrible 2022, as the shine increasingly seems to be rubbing off on Elon Musk’s once-unbreakable automaker.
Its shares fell more than 12% on the first trading day of the new year, after the electric vehicle company missed its fourth-quarter delivery targets.
The latest declines come on top of Tesla’s unprecedented 65% plunge in 2022, when it lost more than $900 billion of its peak-to-gross market value. In December alone, the stock fell 40%.
That slump followed CEO Musk’s takeover of Twitter, amid fears his new acquisition could hijack him from Tesla. At the same time, the automaker is grappling with falling demand, tougher U.S. rules on EV credits and a slowdown in production in Shanghai as worker COVID-19 infections increase.
Here’s what eight Wall Street pundits and influential market voices have to say about what’s going on at Tesla — and with its stock.
Paul Krugman, Nobel economist: Musk’s MAGA endorsement is a marketing mistake
“So Tesla is a brand whose customer base largely consists of wealthy cultural liberals who were drawn in part by Elon Musk’s perceived persona with it,” Krugman said. wrote in a New York Times editorial.
“Given all of this, Musk’s public endorsement of MAGA conspiracy theories is an almost inconceivably bad marketing move, practically designed to alienate his key buyers.”
Musk has weighed heavily in politics since buying Twitter, and Experts say it bolstered right-wing views.
Wharton professor Jeremy Siegel: Tesla’s value is too high
“The problem with Tesla has always been price, and I think that’s the end result,” Siegel saidreferring to the valuation of the manufacturer of electric vehicles – a calculation of the value of the company and its shares.
Its valuation peaked at a forward price-to-earnings ratio of 180x at the end of 2021, the year it started to generate profits. It is currently trading at around 25x, its lowest on record.
“Every stock that’s gone up more than 50 times its earnings has done extremely poorly going forward. It’s the price, not the company, that’s causing problems for investors,” Siegel said. .
Cathie Wood, CEO of ARK Invest: Tesla will keep customers coming back with price cuts
Musk fan Wood said Tesla stock has “miles to go” and could hit $1,500 in the next five years.
“I think there are people who won’t buy his cars now,” she said in a Baron’s interviewreferring to price cuts on Tesla models.
But if it does what we think it will do on the cost side, there are a lot of people who will use economics as a guide…and I think there are a lot more of those people than there are. opponents around Twitter. .”
Wedbush Analyst Dan Ives: Musk Needs to Feature These 3 Things
“Very simply, this is a pivotal year for Tesla, which will either lay the foundation for its next chapter of growth or continue its slide from the top of the roost, with Musk leading the way down,” Ives said in a note as he set a price target of $175.
However, Musk & Co. must now establish: 1) achievable 2023 targets and delivery numbers with stable margins, 2) stop selling stock and document that in the next earnings call, and 3) finally appoint a new CEO of Twitter so that the Distraction/warning risks around Tesla begin to diminish.”
Edmunds analyst Ivan Drury: Clearly Tesla is just another automaker
Tesla once struggled to keep up with demand, but is now using typical industry tricks to address inventory issues, according to Drury.
“These are all very normal issues, but the difference is that it was Tesla that broke all the rules,” he said. told the insider. “Now we see them falling into these same traps that all automakers fall into.”
The analyst believes Tesla will cut prices further. “It’s a company that raced to be different. But now it looks like they’re going to be like everyone else,” he said.
Marco Iachini, research analyst at Vanda: Individual investors are dumping the stock
“We are seeing the first signs of retail burnout in TSLA,” Iachini said. said in a weekly update.
When Tesla shares rose on Wednesday, individual investors failed to crowd in. “The moderate buying indicates that a significant portion of retail traders seized on yesterday’s rally to exit TLSA positions,” he said.
Individual investors have bought more Tesla shares in the past six months than in the previous five years – so the recent selloff has hit hard. “This group is definitely feeling the pinch of the last few months’ drop to $113/sh,” he said.
Morgan Stanley strategist Adam Jonas: Bet on Tesla to win the EV race
“Between a deteriorating macroeconomic backdrop, record deprivation and growing competition, there are hurdles to overcome. Yet, we believe that in the face of all these pressures, Tesla will strengthen its lead in the EV race as it pulls leveraging its cost and scale advantages to stand out from the competition,” Jonas said in a note.
Mark Newton, Fundstrat Strategist: Too early to call a bottom
“We all agree, or most of us, on what Musk is trying to do,” Newton said. said in a CNBC interview.
“Clearly the stock is down a lot in a very short period of time. I just consider it a very risky time to step in and buy right now for those with short timeframes,” he said. added.
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