Investor's Corner

Tesla (TSLA) bull maintains $500 price target amid ‘overblown’ demand worries

(Credit: Friedrich Beckel/Twitter)

When Tesla (NASDAQ:TSLA) Chair Robyn Denholm addressed the attendees of the recently-held Annual Shareholder Meeting, she expressed her thanks at the courage of the company’s investors. “You need to have a certain amount of intestinal fortitude as an investor, and you have that in spades,” she said. Denholm’s comments are in relation to Tesla’s stock being incredibly volatile, partly thanks to the negative narrative surrounding the company.

Among these is the pervading TSLA bear thesis which claims that demand for the Tesla’s electric cars such as the Model 3 is getting soft. This sentiment, at least according to Berenberg analyst Alexander Haissl, has been overblown.

In a recent note, Haissl argued that the negative sentiment that surrounds Tesla today is “decoupled from reality,” adding that the market seems to be failing to understand the electric car maker’s “technological and cost advantage.” Haissl proved optimistic on his note, giving TSLA stock a price target of $500 per share, which implies an over 100% upside within the next year.

“We maintain our bullish view on Tesla and see no reason to walk away from our price target of $500. Demand worries are overblown, as the Q1 volume weakness was largely self-inflicted by logistic problems, uncertainty about store closures and changing pricing structure, and not indicative of the underlying demand situation.

“Q1 weakness does not change our positive fundamental view, as it is not indicative of the underlying strength of the business,” he wrote. “The demand debate is likely to remain an ‘on paper’ battlefield between bulls/bears and will only be resolved once hard facts are reported, as management is given little credibility for any reassuring commentary,” the Berenberg analyst wrote.

Haissl’s price target for TSLA stock is roughly 110% higher than the median forecasts of Wall Street analysts, which currently stand at $238 per share. Nevertheless, the Berenberg analyst is not alone on his sentiments, as Tesla has also received support from Roth Capital Partners analyst Craig Irwin, who recently upgraded TSLA stock from a “Neutral” to a “Buy.” Baird analyst Ben Kallo, a longtime TSLA bull, recently maintained an optimistic $340 price target on Tesla shares, citing the “overly negative” narrative and bear arguments that could be disproven in the “coming weeks and months.”

As of writing, Tesla stock is trading -1.01% at $211.75 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Tesla (TSLA) bull maintains $500 price target amid ‘overblown’ demand worries
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