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Analysts Have Mixed Views on Tesla ahead of Q4 Earnings

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Dec. 4 2020, Updated 10:51 a.m. ET

Ratings on Tesla stock

According to the latest data compiled by Reuters, 32% of analysts covering Tesla stock (TSLA) gave it a “buy” recommendation. Another 32% of analysts recommended a “hold,” while 36% didn’t see any potential upside in the company’s stock price and gave it a “sell” recommendation. These recommendations were based on the views of 31 Wall Street analysts surveyed by Thomson Reuters.

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Target falls to lowest in the last year

As of January 25, 2019, analysts’ consensus 12-month target price for Tesla stock was $330.36, which reflected about 11.2% upside potential from its market price of $297.04. Notably, a higher percentage of total analysts covering Tesla stock has turned negative in the last couple of months. In contrast, in the last six months, analysts’ consensus target price on Tesla has gone up significantly to $330.36 in January 2019 as compared to a much lower target price of $295.05 about six months ago.

Analysts’ skepticism about the company’s ability to maintain good profitability and protect its margins could be two of the reasons for this pessimism. Also, some analysts expect that Tesla will need to raise more money to fund its high volume production and investments in China.

Views on peers

As of January 25, Wall Street analysts’ “buy” recommendations for legacy automakers (XLY) and tech companies were as follows:

  • General Motors (GM): 67% of analysts gave it a “buy,” and its target price reflected 17.6% upside potential.
  • Ford Motor Company (F): only 24% of analysts gave it a “buy,” and its target price reflected 5.2% upside potential.
  • Fiat Chrysler (FCAU): ~43% of analysts gave it a “buy,” and its target price reflected solid upside potential of about 45.4%.
  • NIO (NIO): only 36% of analysts covering NIO suggested a “buy” on the stock, and its target price reflected 18.7% upside potential.
  • NVIDIA (NVDA): 73% of analysts covering the company suggested a “buy,” and its target price reflected 41.9% upside potential.
  • Intel (INTC): 43% of analysts recommended a “buy,” and its target price reflected 12.0% upside potential.
  • Apple (AAPL): 48% of analysts rated a “buy” on the company’s stock, and its target price reflected upside potential of 12.9%.

Continue to the next part where we’ll take a look at analysts’ estimates for Tesla’s fourth-quarter revenue.

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