Step by step, Tesla (NASDAQ: TSLA) stock is steadily recovering from the losses it incurred since the start of 2024. It is bolstering its delivery numbers through effective cost-cutting measures as it approaches June, a historically robust period for EV manufacturers.
However, some unresolved issues remain, casting a shadow over Tesla’s headquarters. The most significant of these is the CEO’s pay package, which could have a substantial impact on the company’s future. On June 13, at the shareholder meeting, Elon Musk will discover the fate of his $51 billion remuneration package.
Additionally, Musk is facing a shareholder lawsuit over his sale of $7.5 billion worth of Tesla shares in late 2022. This sale occurred just before a January 2023 sales report that caused the stock price to plummet.
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With the following earnings report set for July 17, many events could significantly impact TSLA’s stock performance.
Musk might leave Tesla if denied his share
Elon Musk aims to secure at least a 25% personal voting interest in Tesla to maintain significant influence over the company’s direction. If the compensation plan proceeds, he will have a 21% stake, which is close to his goal and likely will ensure his continued involvement with Tesla.
However, if he is denied the promised shares, his stake will drop to 9%, reducing his incentive to stay. In that case, Musk might consider resigning to focus on his other ventures, significantly impacting Tesla’s future performance.
Analysts think annual meeting could impact TSLA shares
Focusing more on the upcoming meeting than the delivery or production numbers, analysts from Wall Street highlight the impact it could have on TSLA stock.
In a recent research note, Barclays analyst Dan Levy highlights that the critical issue for shareholders at Tesla’s annual meeting on June 13 is whether to retroactively re-approve the compensation plan from 2018.
Levy rates Tesla shares as ‘neutral’ with a $180 price target, indicating that he expects the shares to remain stable.
On May 31, Morgan Stanley maintained its ‘overweight’ rating on Tesla stock and kept the price target steady at $310.
Piper Sandler maintained its ‘overweight’ rating on Tesla Inc., with a steady price target of $205. The firm’s stance is focused on the upcoming shareholder meeting on June 13 rather than on financial modeling.
Jefferies analyst Philippe Houchois comments, ‘However ill-designed the scheme was, we believe denying Elon Musk his past compensation would look like misplaced ‘buyer’s remorse.’ Conversely, veiled threats of taking AI business elsewhere look hollow given Tesla’s substantial investment in AI.’ Houchois rates Tesla shares as ‘hold’ with a $165 price target.
Some analysts shift their focus toward deliveries, China and Robotaxi
Canaccord Genuity analysts have raised their price target for Tesla shares and revised their delivery estimates for the upcoming quarter and the 2024 fiscal year, focusing on delivery numbers rather than on the upcoming shareholder meeting,
The investment bank maintained its ‘buy’ rating on the stock, increasing the price target from $222 to $267, suggesting a 50% upside potential from the closing price of $175.
Wedbush analyst Dan Ives forecasts that Tesla’s stock will reach $275-$300 within the next 12-18 months. This prediction is based on the anticipated approval of Elon Musk’s compensation package and strong demand in China.
Ives also emphasizes the importance of Tesla’s Robotaxi event on August 8, expecting significant updates on Full Self-Driving (FSD) technology and a potential $25,000 vehicle.
It seems like the upcoming shareholder meeting could be historical and fate-defining for Tesla, possibly changing the company as we know it.
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