Analyst: Tesla's stock price has dropped almost to its limit, with a potential rebound of 77% in the coming year.

LB Select
2024.03.14 05:58
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Since the beginning of 2024, the trends of Tesla and NVIDIA have been contradictory. While one has been continuously declining, the other has been consistently rising. Some netizens jokingly refer to Tesla as "shorting NVIDIA by one."

Investment bank Wedbush Securities stated in a report today that the market's pessimism towards Tesla's stock has been somewhat exaggerated, with the stock expected to rise by 77% in the next 12 months.

Led by Dan Ives, analysts at Wedbush Securities mentioned in the report, "We believe that the decline in Tesla's stock price has been too steep because for the remaining time in 2024, Tesla's demand will be more stable, price cuts are slowing down, battery costs/production are showing strong cost benefits, and the Model 2 priced below $30,000 will be on the roadmap next year."

However, considering the sluggish demand for electric vehicles, the temporary closure of the Berlin factory due to an arson case, and the controversy surrounding Tesla's sky-high compensation plan, Tesla is also facing challenges in the short term.

Nevertheless, Ives reiterated that Tesla's stock price will reach $315 in the next 12 months. On Wednesday, Tesla plummeted by 4.54%, falling below $170 to $169.48.

Ives believes that to weather this stock storm and rebound, the Tesla board can do three things.

First, draft a new compensation plan for Tesla, higher than the one obtained in 2018, which shareholders can vote on at the May meeting.

Second, the new compensation plan should increase Tesla's voting power to 25%, which Tesla hopes to achieve, and let shareholders vote on it in May.

Finally, Tesla should relocate its headquarters to Texas, where the company is currently based, paving the way for the board to approve the new compensation plan. Since the Delaware court ruled Tesla's $56 billion compensation plan invalid, Tesla has been in favor of this relocation.

Ives also stated in the report, "It's not time for Tesla to give up yet. Despite the storm clouds gathering, we still believe in it."

For Tesla, the start of 2024 has been challenging, with a 23% drop in stock price in January, a 7.8% increase in February, and a 16% drop from March to date. As of last week, Tesla's market value has evaporated by over $200 billion.

The trends of Tesla and NVIDIA are in contrast. Since the beginning of 2024, one has been continuously falling while the other has been rising. Some netizens mockingly refer to Tesla as "shorting NVIDIA by one."

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