Goldman Remains Cautious on Tesla Stock but Projects It Will Do Well Long-Term

UTC by Tolu Ajiboye · 3 min read
Goldman Remains Cautious on Tesla Stock but Projects It Will Do Well Long-Term
Photo: Depositphotos

Having taken a prolonged beating, Tesla stock stokes fresh concern as Goldman cuts price target and Twitter worries alienate investors.

Tesla Inc (NASDAQ: TSLA) stock recently fell after Goldman Sachs cut its price target from $305 to $235. However, the banking giant maintained its Buy rating on the electric vehicle maker’s stock due to positive long-term prospects. Explaining the optimism for Tesla, Goldman analyst Mark Delaney said:

“We believe that Tesla remains well positioned for long-term growth as an EV cost structure and full solution leader (e.g. providing vehicles, charging, storage, software and services in a well integrated manner), and we maintain our Buy rating on the stock.”

Goldman projects that Tesla will hit 420,000 deliveries for the fourth quarter, down from 440,000 before. The leading New York-based investment bank also sees the EV manufacturer delivering 1.85 million cars throughout the next year. Goldman’s latest 2023 delivery projection for Tesla is a 500,000 reduction from its original 1.9 million guidance.

Delaney noted that although Tesla potentially has a production capacity of 2.4 million units in 2023, it is currently experiencing moderate macro indicators. These indicators all suggest that global demand for Tesla vehicles could be softening at this point. Nonetheless, Delaney added that Tesla could also receive a boost in profitability in the years ahead from other demand drivers, such as new battery cells.

Goldman Cites Musk Twitter Antics as Harmful to Tesla Stock

Goldman also noted the increased presence of Tesla CEO Elon Musk on Twitter as detrimental to the company’s stock. According to Delaney, Musk’s recent Twitter antics and foray into political topics have polarized Tesla’s brand. According to Delaney, Tesla must switch back its company’s consumer focus to its technology and sustainability core attributes.

Delaney’s sentiment on Musk’s Twitter activities since taking over the microblogging platform is also shared by Tesla investors. As Tesla stock wallows in a 55% drawdown year-to-date, several prominent stakeholders criticize Musk’s distraction from the EV company. For instance, self-professed Musk fanboy and third-largest individual Tesla shareholder KoGuan Leo stated, “Elon abandoned Tesla and Tesla has no working CEO.” Leo also added, “Are we merely Elon’s foolish bag holders?…An executioner, Tim Cook-like is needed, not Elon.”

As Tesla shares continue to trade at a two-year low, other loyalists and bulls have called out Musk for his controversial tweets. For example, Tesla bull Gary Black stated Wednesday:

“Elon is a brilliant business leader. He will realize soon (if not already) that his polarizing political views are hurting customer perceptions of $TSLA EVs.”

Black also suggested that Tesla stock is weakening because customers do not want to associate with “controversial” cars. According to him, these potential end-users want to be proud of driving Tesla’s products – not embarrassed.

Tesla stock is currently changing hands at $156 after recently sinking 3.2%. In addition, the shares of the leading EV manufacturer have also fallen more than 61% from their record high in November 2021.

Despite the unsavory development regarding TSLA, Musk remains unperturbed. On Tuesday, the brash businessman said he would ensure Tesla shareholders benefitted from Twitter long-term. However, Musk did not elaborate on his plans.

Business News, Market News, News, Stocks, Wall Street
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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