Why Goldman Sachs is still optimistic about Tesla led by Elon Musk
Despite the sharp sell-off over the past month, Goldman Sachs remains bullish on Tesla stock.
“We believe that Tesla, with its leadership in electric vehicles (including vertical integration and tight integration of hardware and software, as well as its ecosystem of charging stations and brands) and A broader focus on clean transport (with solar and storage businesses) would be best positioned to capitalize on the long-term transition to electric vehicles,” Goldman Sachs analysts wrote in A new paper looks at the winners from the switch to autonomous driving.
Goldman reiterated its buy rating on Tesla stock with a $305 price target, assuming a roughly 45% gain from current levels.
“We expect Tesla to expand margins in the medium term as it makes its key Model Y product as well as new plants in Berlin, Germany and Austin, Texas, and in the longer term as it increases combined. software revenue,” the analysts added.
The vote of confidence comes in a tumultuous few weeks for shares of Tesla and CEO Elon Musk.
The stock has rallied about 28% over the past month, reflecting some concern from the high beta EV stock being hit by broader market downturn due to interest rate hike concerns for the threat of a US recession impacts consumer demand for cars with big tickets.
On the second point, auto sales fell slightly in September Retail Sales Report Released on Fridayechoes recent disappointing comments about auto demand from companies like Ford and CarMax.
Musk, meanwhile, remains locked in the fight over Twitter – sparking fears he’ll be distracted from performance at Tesla.
Taken together, those factors contributed to a 40% year-over-year drop for Tesla’s much-loved stock.
Of course, not all investors are headed for Tesla’s door. Longtime Tesla bull, Cathie Wood remains upbeat about the company and Musk.
“Certainly all stocks are struggling in this environment as the market tries to understand how far the Fed is going and how deep this recession will be. So Tesla is a solution to the problem. “. Wood in particular with Yahoo Finance Live. “We think gas-powered vehicles will be obsolete within the next five to 10 years. And the traditional auto industry has to figure out how to transition to electric vehicles and enter the next big thing, which is what we’re getting into,” he said. We think Tesla is leading the way, the self-driving taxi platform stage.”
Brian Sozzi is a great editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and more LinkedIn.
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