© Reuters. Wedbush says negative sentiment on Tesla stock ‘way overdone’
Wedbush analysts said Wednesday they believe the negative sentiment surrounding Tesla (NASDAQ:) stock is “way overdone.”
“We believe the Tesla narrative is as negative we have seen in the last few years with Musk and Tesla getting attacked by the bears from all directions,” analysts wrote.
“Taking a step back, we have been here before with Musk/Tesla a number of times over the last decade as the doubters have said the Tesla story is done and electric vehicles are a fad, not a long term transformational trend that will change the auto industry,” they added.
The broker’s team visited Asia and observed that the competition for pricing in China’s auto market is exceptionally fierce.
However, from their industry evaluations within the country and the surrounding region, there is an emerging consensus that many of these aggressive price reductions are beginning to diminish ahead of the spring/summer of 2024.
This trend is perceived as positive news for TSLA and the electric vehicle (EV) industry at large, analysts noted.
The team pointed out that Tesla remains on track to surpass the production and sales milestone of 2 million units in 2024. Moreover, achieving a range of 2.1 million (base case) to 2.2 million (stretch goal) units is still considered feasible, despite a softer performance in the first quarter, with projections now leaning towards the 430,000 units mark.
The near-term outlook for the EV maker is “not roses and rainbows,” with lackluster demand for Q1, the temporary shutdown of Tesla’s Berlin plant, and noise around Musk’s compensation package.
“That said, we believe the risk/reward is extremely compelling at these levels with the AI story and FSD making major strides at Tesla and in our opinion represents a valuation that could exceed $1 trillion as this next chapter of the Tesla growth story plays out in the field,” analysts said.
