Elon Musk’s electric vehicle (EV) maker, Tesla (NASDAQ: TSLA), has remained a darling of many analysts, investors, and technology enthusiasts even throughout the ever-deepening slowdown that has only become more severe in 2024.
Late in 2023, several analysts predicted that the company would reach and breach a $1 trillion valuation by the end of 2024, with Morgan Stanley’s (NYSE: MS) Adam Jones setting the share price target at $380 and Wedbush’s Dan Ives at $350.
The recent string of losses has, however, dampened the prospects somewhat, causing Jones to lower his expectations – though he only revised them to $345, meaning he is still fairly bullish on the stock overall.
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There have, however, been several notable bears when it comes to Tesla, and the recent string of defeats only made them more bearish. Perhaps the most prominent among them is the Founder and CEO of GLJ Research, Gordon Johnson.
Johnson recently made his own price target for Elon Musk’s company and estimated that it would be worth no more than $24.53 in 12 months’ time – an 87.68% downside that would see Tesla’s market cap plummet from $598.27 billion to just under $75 billion.
Why does Johnson foresee a major crash for Tesla?
GLJ Research’s Johnson shed some light on his reasoning for downgrading Tesla so heavily in an interview he did with CNBC’s Street Signs on January 25, 2024 – just after the company’s latest Q4 report that saw its stock suffer a major 1-day price drop.
In the appearance, Johnson explained that the demand for electric vehicles simply does not exist on the scale Tesla would need to sustain itself.
He added that, despite this fact, competition has grown ever-stiffer with numerous hopeful companies both relatively new – Lucid (NASDAQ: LCID), Nio (NYSE: NIO), BYD (SHE: 002594) – and old – Ford (NYSE: F), General Motors (NYSE: GM), etc – entering the industry.
Johnson continued stating that the competition has forced Tesla to reduce its sky-high vehicle prices and made its supply chain issues increasingly dire – and indeed, the deliveries of the highly-anticipated Cybertruck, for example, have been stalled due to battery production problems by late December 2023.
Finally, the expert also foresaw that Tesla is likely to become a no-profit company again – possibly as early as Q1 2024 – and cast doubt on the future of the entire EV industry. Backing this belief, Johnson pointed toward the fact that major traditional vehicle manufacturers have scaled back on their green energy projects.
What is the analyst consensus for TSLA?
While it is difficult to tell at this point whether Johnson is right or wrong, based on the opinions of 34 analysts taken into account by TipRanks, he certainly appears to be an outlier with his grim forecast.
On average, experts foresee a notable 15.74% upside for Elon Musk’s EV maker and set the 12-month price target at $220.98. As of the time of publication, Adam Jones remains the analyst with the highest price target – $345 – and Johnson with the lowest – $23.53.
Most analysts – 16 of them – recommend investors and traders hold Tesla stock. Another 12 believe it is the right time to buy, while 6 believe selling is the right call.
TSLA price analysis
Whichever way the market winds may blow in the future, it is true that Tesla has been falling within all commonly considered longer time frames other than in the last 52 weeks. However, even its 1-year gains are in jeopardy because of the current trend, as the company’s stock is only 14.56% in the green compared to late January 2023.
The company’s share price also fell significantly since New Year’s Day – it is 23.14% in the red – and last week also brought a decline of 9.68%. The last full trading day – Monday, January 29 – was, however, significantly stronger and saw Tesla rise 4.19% to $190.93.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
