Tesla stock has a long road to recovery after it dropped 69% in 2022 in its worst year on record.There are four catalysts that could jumpstart a rally in Tesla stock, according to Wedbush analyst Dan Ives.”Tesla still has potentially $5-$6 of earnings power in 2023 and should still approach 40%+ delivery growth,” Ives said. Loading Something is loading.
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Tesla stock is on pace for its worst year on record, falling 69% year-to-date and erasing nearly $750 billion in market value as CEO Elon Musk splits his time between SpaceX, Tesla, and his newly acquired Twitter.
But Wedbush analyst Dan Ives sees a turnaround in the making for Tesla, arguing in a Tuesday note that the stock will find its bottom and spark a significant rally.
The problem with Tesla stock right now is the fact that Musk has lost his credibility on Wall Street in recent months, having broken promises about him selling stock “again and again and again,” he said.
“The Twitter fiasco, opening up the political firestorm on Twitter, and brand deterioration for Musk and Tesla has led to a complete debacle for the stock,” Ives said.
Still, he isn’t backing down from Tesla, as he reiterated his “Outperform” rating and $175 price target, which represents potential upside of 58% from current levels. (On Friday, Wedbush cut its Tesla price target to $175 from $250.)
Ives sees potential in Tesla stock if it can execute on four bullish catalysts, according to the latest note.
“We believe if Musk refocuses back on Tesla, truly stops selling stock (walk the walk, not just talk the talk), the Board initiates a buyback, and 2023 guidance is set conservative on its fourth-quarter call in January then this stock has bottomed in our opinion and works from here,” he said.
“Tesla still has $5-$6 of earnings power in 2023 and should still approach 40%+ delivery growth in a brutal macro environment,” he added. “However, any further Musk strategic missteps will be carefully scrutinized by the Street and further weigh on shares.”