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. Something is loading.
Thank you for your registration!
Access your favorite topics in a personalized feed on the go. download app
Tesla stock has gotten off to a bad start this year after suffering a terrible 2022, as the shine increasingly seems to be rubbing off on the once Elon Musk-bump proof 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 market value from peak to peak. 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 rise.
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 Prize-winning economist: Musk’s support for MAGA 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 wrote in a New York Times op-ed.
“Given all of this, Musk’s public endorsement of MAGA conspiracy theories is an almost inconceivably bad marketing move, virtually designed to alienate his key buyers.”
Musk has weighed heavily in politics since buying Twitter, and experts say he’s bolstered right-wing views.
Wharton professor Jeremy Siegel: Tesla’s valuation is too high
“The problem with Tesla has always been price, and I think that’s the main thing,” Siegel said, referring to the EV maker’s valuation – a calculation of the company’s value and his actions.
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 has been increased by 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,” he said. Siegel.
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 an interview with Barron, referring to price cuts on Tesla models.
“But if he does what we think he’s going to do on the cost side, there’s a lot of people who will use economics as a guide…and I think there’s a lot more of those people than there are. naysayers 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 groundwork 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 name a new Twitter CEO so that the potential for distraction/attention around Tesla begins to decrease.”
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 Tesla broke all the rules,” he told 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 in a weekly update.
When Tesla’s stock rose on Wednesday, individual investors failed to pile in. “Moderate buying indicates that a significant portion of retail traders took advantage of yesterday’s rebound 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 widen its lead in the electric vehicle race as it pulls leveraged its cost and scale advantages to stand out from the competition,” Jonas said in a note.
Fundstrat Strategist Mark Newton: Too early to call a bottom
“We all agree, or most of us, on what Musk is trying to do,” Newton said in an interview with CNBC.
“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.