What happened
Tesla (NASDAQ: TSLA) stock has had an incredible run this year – up 376% by the close of Friday – but even the best electric cars will eventually have to pause and recharge. What is interesting about today’s sale is that it comes at a very early time.
This morning, investment bank Wedbush announced that it would increase its bull bull price on Tesla stock from $ 2,500 per share to $ 3,500, reports TheFly.com. And Tesla file is down 2.5% on that news (from 11:20 a.m. EDT)? But why?
Image Source: Getty Images.
So what
Maybe it’s because Wedbush’s latest prediction of Tesla’s share price value seems a bit … greedy. I mean, Tesla has made the stock market performance sound nice, right? It’s basically quintupled this year, and it’s gone up more than eightfold in the last 52 weeks, against a S&P 500 profit of barely 18%.
At the peak of that run, Wedbush’s prediction of a potential $ 2,500 share price was already pretty ambitious. With stock selling at $ 2,050 at the end of last week, an increase to $ 2,500 would boost to 22% year-on-year growth. But that was not good enough for Wedbush.
Oh, no. It had to raise its forecast to $3, 500.
Well what
Or did it?
Remember: asking Tesla stock to shoot up another 71% on the back of “robust and stronger-than-expected” demand would seem a bit irrationally broad in light of last week’s news that Chinese-built registrations of Teslas in July fell 24%. Predicting a “perfect storm of demand” when demand just declined would seem to fly in the face of reality.
But here’s the thing you may have missed: Wedbush called its $ 3,500 target a “bull case” scenario – the number of Tesla stocks could rise if literally everything went well for the company. The analyst notes that a more realistic estimate for Tesla – somewhere between bulls and bears, where a few things could go wrong – is still $ 1,900 per share, or 7% below where Tesla traded Friday.
I think it is this cautious remark that is taking up again today in investor enthusiasm for Tesla stock.
