TSLA Stock: Jefferies’ Love-Hate Relationship Continues

Today, Jefferies raised Tesla stock’s (TSLA) target price from $300 to $400. Based on yesterday’s closing prices, it represents a potential upside of almost 19%. That said, Jefferies has had a love-hate relationship with TSLA stock over the last year and the brokerage has revised its target price multiple times.

TSLA stock

Today, Jefferies raised Tesla’s target price by $100 to $400. Looking at consolidated ratings, Tesla has received a “buy” or higher rating from 11 analysts while 8 analysts have given it a “hold” rating. The remaining 14 analysts surveyed by Reuters have given TSLA stock a “sell” or lower rating.

TSLA’s mean consensus price target of $262.72 represents a potential downside of 22.8% over its yesterday’s closing prices. Notably, several analysts raised TSLA stock’s price target after its Q3 earnings beat. Read Tesla Stock: J.P. Morgan, RBC Raise Price Targets for more analysis.

Jefferies’ love-hate relationship with Tesla

Meanwhile, Jefferies has revised Tesla’s target price multiple times over the last year. In December 2018, Jefferies upgraded TSLA stock from a “hold” to “buy” and raised its target price from $360 to $450. Notably, Tesla actually closed with gains in the fourth quarter of 2018 even as the S&P 500 plunged. While Jefferies was positive on Tesla heading into 2019, the bullish thesis was punctured as Tesla reported dismal first-quarter earnings.

Things got even worse after the company posted a wider-than-expected loss in the second quarter, too. Jefferies gradually lowered its target price amid rising pessimism towards Tesla. Notably, the stock has underperformed mainstream automakers like Ford and General Motors as well as the S&P 500 (SPY) this year.

TSLA stock price action

Meanwhile, TSLA stock’s fortunes revived last month. The company posted a surprise profit in the quarter that triggered a buying spree. Bears were running for cover and lost big amid the stock’s rise. TSLA is amongst the most shorted stocks.

That said, despite the short squeeze, some prominent Tesla bears like David Einhorn are still trying to justify their bearish stance. Not to be left out, Tesla’s CEO Elon Musk fired back at David Einhorn over its investor letter criticizing Tesla.

What now?

As we have noted previously, the momentum in TSLA stock is looking strong. The fourth quarter might be another record for the company at least in terms of deliveries. Also, bears are currently on a back foot after the recent beating. For now, bulls seem to have an upper hand. That said, watch out for fourth-quarter earnings to see whether Tesla is really turning sustainably profitable.