To The Moon

🌟🌟🌟$Tesla Motors(TSLA)$ 

stock was  up 2.2% last Friday but down 17% in the past month.  However Tesla is still up 98% year to date.

A recent negative analyst report by Michael Tyndall, HSBC analyst dealt a major blow to Tesla with a Sell rating, Target price of USD 146.

According to Tyndall, Tesla's valuation appears to be based on several major investments that won't affect the profits until the end of the decade.  These include Tesla's long hyped Fully Autonomous Software that is likely to require a subscription, its Optimus robot and its Emerging Dojo supercomputer service.

Tyndall said that Tesla's target of 20 million vehicles annually by the end of the decade is too ambitious based on the current growth of the Global transition to EVs.  As a comparison that figure is twice the current level of both Toyota and Volkswagen, the 2 largest Auto companies combined.

Tyndall also said that CEO Elon Musk presents a "single man" risk.  If anything is to happen to Elon Musk, the market's enthusiasm for Tesla could plummet.

Another worry is President Biden's support for UAW in its attempt to unionise Tesla in the US. 

Tesla's share price is at the USD 210 support level.  If it goes below that level next week, Tesla's share price could drop further.

 2023 has been a challenging year for Tesla with intense competition from other EV companies.  Tesla has also been cutting prices of its EVs.  This has been reflected in Tesla's 3Q 2023 Earnings where its revenue grew by just 5% year over year to USD 19.6 billion.  This is a sharp drop from the 55% growth rate it enjoyed from previous year quarter.

Fortunately not all Analysts are Bearish on Tesla.   According to Tip Ranks, Tesla is a Buy with an average Target Price of USD 252.61,an upside potential of 17% based on 33 Wall Street Analysts. 

Tesla is also working on producing a USD 26,867 EV at its factory in Germany.  In contrast the current cheapest model of Tesla, Model 3 starts at USD 38,990.  Lower cost models  can help Tesla improve its production volume and sales.

New Tesla Cybertruck deliveries will start on 30 November with the assembly line ramping up to full capacity in 2024.

No matter what the Wall Street Analysts prediction maybe on Tesla, I believe that Tesla will continue to dominate the EV scene for many years to come and retain its leadership position due to its first mover advantage over its competitors.  Tesla is a profitable company and has many projects in the pipeline to keep it humming along for many years to come.  It also has a brand moat as owning a Tesla EV is synonymous with prestige and quality. 

Is Tesla a Buy?  That is a YES for me and if it drops below USD 200, it is a great opportunity to bargain hunt. 

Great companies like Tesla will continue to grow and thrive in the long term.  In the short term however it may face macro headwinds.  As Charlie Munger who is 100 years old this year likes to say - The Big Money is not in the Buying and Selling but in the Waiting. 

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