Despite the global macroeconomic risks and market price volatility, Tesla (NASDAQ: TSLA) has been on an upward trajectory throughout 2023.
Wall Street analysts, however, worry about operating margins dropping and price cuts for Tesla vehicles, which is why they see a moderate price increase in the next 12 months.
The average analyst target price sees a 4% gain
Analyst consensus at TipRanks is a ‘hold’ based on 28 analysts, with an average target price of $253 for the next 12 months. That’s 4% above the current price of $242 per share.
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TipRanks analyst price target. Source: Interactive Brokers Fundamentals Explorer
Some analysts aren’t overly enthusiastic about Tesla’s stock price in the next 12 months mainly because its Q2 earnings report showed the company’s operating margins dropped to 9.6%, the lowest level in the last five quarters, as well as worries about electric vehicle price wars.
Also, during the earnings call, Elon Musk and other executives failed to deliver precise specs and delivery dates for the Cybertruck and for a robotaxi vehicle. They also said that vehicle production would slow down in Q3 because of factory upgrades.
However, regarding Tesla’s gross margin, Musk said:
“The short-term variances in gross margin and profitability really are minor relative to the long-term picture. Autonomy will make all of these numbers look silly.”
The company also posted an all-time high quarterly revenue, meaning the headwinds could be short-lived.
TSLA stock technical analysis
Tesla’s stock price bounced off of the $300 price level, which coincides with two major resistance points — a round number that held for the past two years, as well as the top of the descending trendline that started since the October 2022 peak.
TSLA trades around the 100-day simple moving average and the $250 price level. On the weekly chart, we have a bearish engulfing pattern at the $300 top, which is a reversal pattern. This means trading at $200 in the coming weeks is a realistic scenario.
TSLA stock, weekly price chart. Source: StockCharts.com
Tesla has returned 124% to investors year to date, outperforming the S&P 500’s 17% return.
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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.
