Investor's Corner
Oil Prices Sinking Tesla Motors Stock?
As I was watching a recent webinar on forward-looking trending tools for stocks, the moderator popped Tesla Motors stock chart on the screen to demonstrate the Fibonacci retracement and Ichimoku tools. Perfect timing, I’m a long investor in Tesla Motors stock and what about these downward oil prices?
Financial media sites are in a tizzy regarding oil prices plummeting—Saudis pulling the strings—and how this poses a big hurt for electric car industry sales and, of course, Tesla Motors stock price. Sine I cover the oil and gas industry for the Chicago-based Automation World magazine, the Saudis’ primary “displacement” target is U.S. shale.
Fracking shale plays are very expensive due to the fact that oil and gas drilling companies have to setup so many wells in order to find shale sweet spots. Plus, these small-to-medium sized drillers are financially over-leveraged and need barrel prices to be somewhere around $80 a barrel in order to be profitable. That’s not going to happen for some time, did I say “displacement.”
However, it does begs the question whether there is a decent correlation between high gas prices and electric car sales in the last four years, and will lower gas prices doom Tesla Motors’s stock price for the near-term or long-term?
Source: Energy Information Agency
As a Energy Information Agency chart shows above, there’s not a direct correlation between sales and increase gas prices. However, I believe some EV automakers will take a hit from really low gas prices in 2015–say $2.10-2.20– but not Tesla Motors.
Why? Tesla Motors owners are not obsessed with the price of power for their car, compared to a Volt or Leaf owner is my theory, and this car just won the award for the highest satisfaction from Consumer Reports, two years running.
Plus, Americans are buying more expensive cars, north of $50,000. TrueCar just this week released data on buying patterns and showed:
From January through November 931,064 vehicles were sold in the U.S. with average price above $50,000, a whopping 30.8 percent increase compared to the same period last year, according to TrueCar.
So with lower oil prices soon to be a non-issue or baked into Tesla’s current stock price, is it attractive at $210 or lower? How long will this downward, selling pressure last?
Ishimoku technicals (forward-looking indicators) point to new lows being tested in the near term, such as the $203 level. So Tesla shorting could continue and recent data shows 23% of Tesla stock owners were shorting in November.
According to John Del Vecchio and Tom Jacobs’ book What’s Behind the Numbers? (via a Nasdaq.com article), this is why you short a stock:
We recommend waiting until there is aggressive revenue recognition, weakening balance sheets, and deteriorating cash flow trends. It’s the flipside of value-with-catalyst, which is fundamental analysis of value combined with a catalyst for stock market buying to boost the price to realize that value.
As most Tesla Motors investors and followers know, the company’s cash flow is quite positive and revenue is on solid-footing with production capacity investments made in 2014, and the company’s estimate of 50,000 vehicles delivered in 2015. In 2014, Tesla will probably deliver just under 35,000 vehicles, a solid increase.
So there may be an opportunity to buy in the near-term for longs, as I feel the oil price “news” won’t really affect Tesla sales in 2015. One caveat, although, is to keep an eye on Model X news and possible struggles in hitting a 250 mile range for this coveted SUV. This could dampen the stock price if problems persist.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Tesla finishes its biggest Supercharger ever with 168 stalls
Elon Musk proposes Grok 5 vs world’s best League of Legends team match
