Tesla, Inc. TSLA shares have been languishing since the company released its third-quarter earnings report in mid-October. The stock did not budge despite the electric vehicle maker reporting above-consensus deliveries report last week. Still, an analyst on Friday doubled down on his bullish stance on the Elon Musk-led company.
Road to Recovery: The path to Tesla’s revival seems fraught with challenges. But Argus analyst Bill Selesky believes Tesla’s sales, margins, and earnings per share will likely reaccelerate in 2024. The factors that once posed as barriers to success, such as a sluggish EV market, rising interest rates, elevated inflation, and supply-chain disruptions, are expected to turn into tailwinds, the analyst said.
He expects interest rates to trend lower, inflation to decelerate, and supply chains to improve. The comeback seems to be on the horizon, but is it built on hope and faith or solid ground? The verdict remains to be seen.
Secret Weapon: Tesla is preparing to unveil its secret weapon – the growing reliance on artificial intelligence in manufacturing and factory utilization, which is seen as a significant competitive advantage, Selesky said. The company is banking on AI to lead its resurgence, a move that some investors view as shrewd and innovative while others may raise a skeptical eyebrow. Only time will tell if this gamble will pay off.
“Additionally, we believe AI is an undervalued component of the future growth at Tesla and expects its value to be recognized soon on Wall Street as FSD (full-self drive, battery cell production, and AI-enabled robots become a bigger part of the future at Tesla,” he said. The big question is – can artificial intelligence truly save the day here?
Bulls on the Horizon: With Tesla accounting for approximately 50% of the EV market in the U.S. and 20% of global shipments, Selesky said, “We believe TSLA has an opportunity to grow market share in 2024.”
Deepwater Asset Management’s Gene Munster said in his 2024 tech predictions that he expects Tesla to maintain its U.S. market share. Selesky noted that recent entrants to the EV market, such as Ford Motor Co. F, General Motors Corp. GM, Toyota Motor Corp. TM, and Volkswagen AG VWYAG, along with newcomers like Nio, Inc. NIO, Lucid Motors, Inc. LCID and Rivian Automotive, Inc. RIVN, have been struggling to right-size their future capex budgets.
Argus has a “Buy” rating and a $316 12-month price target for the Tesla stock, suggesting a 33% upside potential. To buy or not to buy, that is the question.
Tesla ended Friday’s session down 0.18% at $237.49, according to Benzinga Pro data.
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