Stocks

CFRA analyst: Tesla’s stock has a potential upside of 68%

According to CFRA vice president Garrett Nelson, Tesla’s recent stock plunge is simply a correction that was long overdue. Nelson believes that the stock price will eventually rebound to $275, which would represent a 68% increase from Friday’s closing price.

Nelson explains that the drop in Tesla’s shares, which have fallen over 35% since the beginning of the year, is a logical consequence after the stock doubled in value in 2023.

Looking ahead, Nelson identifies several factors that could drive a rebound for Tesla. One of the main catalysts is the distress in the electric vehicle industry, which he believes will once again put Tesla in the spotlight.

Nelson describes Tesla as the best option in a struggling market, particularly in North America and Europe. While major US car manufacturers are shifting their focus to hybrid alternatives and abandoning their EV growth plans, smaller firms are facing existential challenges. For example, Fisker, a start-up in the industry, is preparing to file for bankruptcy.

The overall vehicle sales in the industry have been slowing down, impacting Tesla’s revenue and leading the company to reduce prices on its models. However, Nelson believes that Tesla is well-positioned to weather any sector strain and increase its market share as competition diminishes.

Nelson highlights Tesla’s ambitious plan to grow its annual volumes to around 20 million units, which would make it the largest auto manufacturer, surpassing Toyota. Even if Tesla falls short of this target, Nelson still sees a pathway for the company to become the largest auto manufacturer.

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