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Analysts remain bullish on Tesla’s stock despite a 9% drop YTD

Analysts remain bullish on Tesla's stock despite a 9% drop YTD

With electric vehicle manufacturer Tesla’s (NASDAQ: TSLA) stock dropping 8.9% in 2021, most Wall Street analysts are bullish about the company’s future despite impending challenges ranging from supply chain to increasing competition. 

After surpassing Q1 2021 analysts’ projections, 11 out of 24 analysts believe the stock presents a perfect buying opportunity, according to TipRanks.com. Six analysts recommend holding while seven are advising investors to sell.

TipRanks.com data.

Furthermore, New Street’s global team head Pierre Ferragu expressed that Tesla will easily surpass the deliveries targets for 2021, even without the Austin and Berlin factories. Historically, meeting delivery targets has always influenced Tesla’s stock. 

“TSLA start of production delayed to January? So what? No contribution from Berlin is in consensus expectations for this year. I think Delivery will exceed these expectations without Berlin and without Austin in 2021,” said Ferragu. 

Tesla stock performance YTD. Finbold.com data.

Are analysts wrong on Tesla stock?

Elsewhere, Gordon Johnson, who has in the past questioned Tesla’s 2020 meteoric rise, maintains that the company is still at risk of failing to meet delivery targets. 

According to Johnson, investors should not bank on Tesla after beating analysts’ estimates by 13,000 cars. The company delivered 184,800 vehicles in the first quarter of 2021. Johnson notes that analysts had incorrectly cut their delivery estimates for Tesla from 188,000 to 171,600 units. He believes most Tesla analysts are either overreacting to Tesla’s Q1 delivery numbers or misunderstanding them, hence the need to sell. 

Investors had expected Tesla stock would surge after the impressive Q1 results, but there remains some level of skepticism. 

Eric Schiffer, CEO of private equity Patriarch Organization, notes that investors are rejecting the stock.

“Tesla’s performance was OK, but it wasn’t an Elon Musk slam dunk…I don’t think people are into Tesla because of bitcoin. Investors are rejecting the stock short term,” said Schiffer. 

However, according to Rod Lache, Tesla remains a bullish stock, and investors need to hold it since the company is meeting its targets. He said:  

“We’re still bullish. Despite all of the skepticism, this company has done what it said it would do: Sell small volumes of high-priced electric vehicles, like the Model S and Model X, to help fund the development and production of mass-market cars, like the Model 3 and, eventually, the Model Y.”

Amid questions about Tesla stock factors regarding increasing competition and global chip shortage still linger. However, the company’s entry into the crypto space might have an impact on the shares.

In February, Tesla announced a $1.5 billion investment in bitcoin. During the first-quarter results, the company revealed that its bitcoin fortunes stand at $2.5 billion. 

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