Analyst: Is Tesla Stock Poised to End its Losing Streak?

Tesla shares have been on the up and up throughout much of 2023, despite some losing streaks in more recent weeks. With the stock still up 84 percent year to date during Monday trading, some analysts think Tesla shares could now be poised to end their recent losing streak, due to a few important factors.

Above: A Tesla logo on a Model X (Image: Casey Murphy / EVANNEX).

Barron’s writer Al Root says Tesla stock was “poised to snap a losing streak” on Monday, citing positive outlooks from analysts and the company’s upward movement in the market following a losing streak. Tesla shares were up on Monday after dropping for six days in a row, and for as many as 13 of the past 14 days. In the past six trading sessions, shares were down nearly 10 percent, and around 17 percent over the past 14.

On recent drops and dimmed investor outlook in recent weeks, Root notes a combination of market slide, economic uncertainty in China and electric vehicle price concerns. In the last 14 days, Nasdaq Composite has also been down roughly 7 percent, with bond yields rising. Analyst Jeff Chung (Citi) pointed to as many as 23 price cuts at EV companies in China throughout the beginning of August, and the country remains an important market for the emerging auto sector.

The surge comes after Baird analyst Ben Kallo included Tesla on a list of “best ideas” after the automaker’s Q2 earnings report. Despite profit margins being impacted by Tesla’s price cuts, Kallo argues, many other catalysts could be set to continue the stock’s boost. With Tesla shares rising throughout Monday trading, Kallo rates the stock a Buy with a $300 price target.

As for reasons to have a positive outlook on Tesla shares in the coming weeks and months, Kallo cites the “Cybertruck launch, a wider-scale adoption of Full Self-Driving (FSD), continued growth in the Energy business, expanding into new markets, and a possible AI Day.”

The Tesla Cybertruck represents the automaker’s first full-scale vehicle launch since it debuted the Model Y in 2020. It also marks Tesla’s entry into a competitive electric pickup truck market, competing directly against the Ford F-150 Lightning, the Rivian R1T and other companies planning to debut electric trucks.

The Cybertruck has been spotted on numerous accounts in recent weeks, both being transported on the highway, and around the Tesla factory in Austin, Texas. While mass production for the new vehicle is set for 2024, initial deliveries are expected to begin this quarter, and some of them even seem to be going out a little earlier than expected.

At the time of writing during market open on Monday, Tesla shares are trading at $227.26 (+$11.73), up 5.44 percent.

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Source: Barron’s