Investor's Corner

Tesla gets its mojo back and Wedbush responds with price target move

Tesla stock (NASDAQ: TSLA) has evidently gotten its mojo back. At least, that’s what analysts from both Morgan Stanley and Wedbush are saying.

Over the past five days, Tesla shares have exploded over 26 percent, nearing what would be their highest price of the year if they are able to gain just two additional dollars of value.

The recovery is just what the bulls of Tesla were looking for. Now, Wedbush analyst Dan Ives is responding to the strong week, which was surged mostly by a delivery beat for Q2 and potentially by strong energy division figures, with a new price target for Tesla.

Mojo Back for Musk

Wedbush has raised its price target to $300 from $275, highlighting a “major turning point” in the Tesla bull case.

Tesla beat delivery expectations by nearly 6,000 units when it reported Q2 numbers yesterday, strongly led by the Model 3 and Model Y, just as anyone who has been following along for the last few years would expect.

Elon Musk’s custom Tesla-branded Nike shoes (Credit: DMCustomSneakers via Instagram)

Ives believes the Tesla stock explosion is catalyzed by that, but also by the fact that the company is “the most undervalued AI play in the market” as Robotaxi Day approaches:

“The key for Tesla’s stock is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla on August 8th that will lay the yellow brick road to FSD and an autonomous future.”

Ives has always been bullish on Tesla, but was more than willing to admit that a choppy start to 2024 was enough to have some investors concerned. Nevertheless, the long Tesla play could be the best strategy for investors as the company moves closer toward autonomy and solving its Full Self-Driving suite, which is the main driver behind more value for shares in the future.

Bull Case for Tesla to $400

Ives and Wedbush also upgraded their bull case for Tesla stock to $400.

This is primarily driven and completely reliant on Tesla solving autonomy and FSD as a whole, which could drive the company back to the elusive $1 trillion valuation, a club that the automaker was once apart of:

“We believe in a bull case scenario the Tesla FSD piece/segment could be worth $1 trillion alone. We continue to believe that Tesla is more of an AI and robotics play than a traditional car company… the rubber meets the road as the Street anticipates August 8th as a key linchpin day for the Tesla story.”

Ives reiterated in this note, as he did with the first note on Tuesday that he and Wedbush believe the worst is in the rear view mirror as Tesla continues on in 2024. With Musk’s pay package dilemma out of the way and the company at least seeing some growth from Q1, investors have fewer concerns than before.

Of course, there is still the overhang of year-over-year delivery reductions, but Tesla is basically debunking that theory with its “between two waves of growth” narrative. Warning investors of this earlier this year was a good play for the company, but it will need to execute with its next-gen platform and Robotaxi over the next few years to keep concerns to a minimum.

Wedbush maintained an ‘Outperform’ rating, and sent its price target to $300 from $275.


Tesla gets its mojo back and Wedbush responds with price target move
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