03. Tesla, Inc. (NASDAQ:TSLA)
Price Reaction after the Price Target Cut: -3.67 (-1.70%)
On January 18, Barclays analyst Dan Levy made notable adjustments to the evaluation of Tesla, Inc. (NASDAQ:TSLA), a major player in the electric vehicle and clean energy industry. Levy lowered Tesla, Inc. (NASDAQ:TSLA) price target from $260 to $250 while maintaining an “Equal Weight” rating on the shares. Following this revision, the closing bell on January 18 witnessed a significant negative price reaction, with Tesla, Inc. (NASDAQ:TSLA) experiencing a decline of 1.70%. Despite the reduction in the price target, the decision to maintain an “Equal Weight” rating suggests a balanced outlook, indicating that Tesla, Inc. (NASDAQ:TSLA) is expected to perform in line with industry peers.
Tsai Capital Corporation stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2023 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) ($248.48 – up 101.7% for the year. Recent high $299.29): Tesla has significant and underappreciated competitive advantages across multiple verticals including electric vehicles, software and energy storage. Misunderstood by much of Wall Street – and consequently a favorite of short sellers – Tesla continues to grow rapidly and increase its lead over the competition while delighting consumers in the process. Despite his unconventional (and sometimes off-putting) personality, Elon Musk is a visionary who has created enormous shareholder value. Musk is also a long-term thinker who has embraced the scale-economies-shared business model favored by Henry Ford and Jeff Bezos, intentionally reducing prices, increasing the customer value proposition and expanding the total addressable market. Tesla’s massive scale and cost advantages are now challenging the viability of legacy auto, which has hundreds of billions of dollars of outdated property, plant and equipment in a world that is rapidly transitioning to electric vehicles (EVs). While we expect competition for EVs to intensify and for Tesla to lose market share over time, we also believe the company will increase production and deliveries from approximately 1.8 million vehicles today to approximately 15 million vehicles in 2030 and further its lead in autonomous driving capability. In fact, we expect Tesla will eventually license its autonomous driving software, creating high-margin (70-80%), recurring licensing revenue. Tesla is also one of only two companies that dominate the energy storage market, which has the potential to grow to several hundred billion in revenue as power plants around the world increase their focus on renewable energy. Our investment in Tesla is aligned with our preference for companies that have strong balance sheets and the managerial skill to reinvest capital at high rates of return into large addressable markets.”
