Tesla stock (NASDAQ: TSLA) is renowned as the first Electric Vehicle mover in the North American market to date. Tesla’s stock price has risen 42% over the past 12 months, even following a nasty open to 2022 with the wider tech market in free fall. The previous year also marked TSLA’s best performing trading periods since its initial listing in 2010.
More recently, Tesla stock has dropped to $800 a share with the wider market focused on inflationary pressures and the economic impacts on supplies following the Russian invasion of Ukraine. However, the Ukraine crisis may push European nations towards a faster implementation of reneweable energy as Russia threatens the economic impact of sanctions on its oil and gas.
With plenty to discuss, this article will dive into the TSLA Stock Forecast, and evaluate the upcoming catalysts you need to know about.
Wallstreet Remains Upbeat On The TSLA Stock Forecast
In February, Morgan Stanley analyst Adam Jonas highlighted in a note to investors that Tesla’s overall US market share was 4% in January, with sales up 63% year-over-year. This growth is compared to the broader market’s unit volume being down 10% year-over-year, adding that Tesla’s U.S. share will average 3.5% in 2022.
Jonas estimates that Tesla’s US Auto Marketshare can reach 10% by the end of 2026 and nearly 18% by 2030. The analysts model sees Tesla generating more revenues than GM and Ford combined by 2027. The Morgan Stanley analyst is Bullish on Tesla Stock with a $1,300 price target. The forecast from Adam Jonas implies a healthy upside of 39.48% from the current trading price.
Midway through January, Mizuho analyst Vijay Rakesh increased the firms price target on Tesla Stock to $1,300 from $950, maintaining a bullish “buy” rating on the stock. Rakesh is particularly upbeat on the outlook on Tesla Stock for 2022, noting it “should be a big year” for electric vehicle makers in particular.
The Wallstreet analyst also cited Tesla’s strong Q4 delivery numbers, that were boosted by increased volumes in China. Rakesh remains Bullish on Tesla Stock (NASDAQ:TSKLA), Rivian (NASDAQ:RIVN) and Nio (NYSE:NIO) as key players in the EV space in 2022.
TSLA Gets All-Clear To Begin production at Berlin Giga-Factory
On Friday, German officials gave Tesla the all clear to begin production of Tesla vehicles at its Berlin Giga Factory. Wedbush analyst Daniel Ives believes the approval removes a major overhang on the stock over the past few months. The analyst “cannot stress the production importance” of Giga Berlin to the overall success of Tesla’s footprint in Europe, as the shipping cars from Shanghai to Europe was not a sustainable trend logistically speaking.
With the race for electrification in Europe hitting another gear and competition for EVs increasing from every angle, Ives views Giga Berlin as a major competitive advantage for Tesla to further build out its supply footprint in this key region. The analyst sees Tesla Stock as undervalued, with a $1,400 price target on the firms Tesla Stock price forecast.
Why ARK See Tesla Stock Hitting $3,000 by 2025
Earlier this year, analyst Tasha Keeney at Ark Invest released the firms updated 5 year price target model on Tesla stock. Ark have set a $3,000 price prediction for 2025 which models both Bullish and Bearish scenarios of Tesla’s Stock Price Forecast. Ark invest is run by infamous Tesla Bull, Cathie Woods.
In Ark’s valuation model, they noted a Bull case valuation at $4,000 a share and a bearish target of $1,500. In the Bull case thesis, Tesla will sell 10 million vehicles in 2025 whilst its bear case suggests 5 million vehicles sold. ARK had also priced in the potential of Tesla’s insurance business over the next 5 years. With Tesla vehicles collecting real-time data, the company can underwrite the insurance risk of their vehicles opening a door for Insurance products.
ARK forecasts the company will turn over $23 Billion in revenue annually from its insurance products alone by 2025 (Bear Case Scenario). All together, Ark sees Tesla revenues in the ball park of $300 Billion by 2025 vastly exceeding Morgan Stanleys models.
Credit Suisse Turn Bullish on TSLA Stock After Q4
On January 31, Credit Suisse analyst Dan Levy upgraded Tesla to Outperform from Neutral with a price target of $1,025. Levy sees the stocks recent sell-off as a buying opportunity as Tesla remains a “one of one” stock. The upgrade comes after Tesla beat Wallstreet estimates in their Q4 results, generating $17 billion in the fourth quarter.
Furthermore, the analyst added that Tesla stock will likely rebound as the companies fundamentals continue to improve. Future volume growth and sustained margin stability is expected to drive upside to Wallstreet forecasts, according to Levy.
What this means for Tesla investors?
The general consensus across the board of analysts is moderately bullish, with institutional price targets for this month suggesting an average Buy rating.
However, it’s important to note over the past 6 months, a fair share of both institutions and investors including Michael Burry have rang the alarms on Tesla’s valuation.
It is important to understand why Tesla is trading at high multiples, because it does not necessarily mean Tesla Stock will crash. It generally means that investors are willing to pay more now for Tesla stock, for the benefits they see in the Tesla Stock Forecast.
Whether or not this justifies its multiples has been an ongoing debate over the past 5-10 years. It ultimately comes down to the type of investor and whether the future cash flows exceed the companies current valuation or not.
The Bottom Line: TSLA Stock Forecast
In summary, the Tesla Stock Forecast continues to divide the bulls and the bears with its future outlook in 2022.
The bullish sentiment from analysts in 2022 so far is a positive sign for long term shareholders. In addition, the positive revenue forecasts and continued delivery growth from Tesla is not to be underestimated.
However, investors should tread with caution as the EV industry has seen a fair amount of market volatility as of late. The bears including Michael Burry see the valuation of Tesla unjustifiable even considering the potential of the EV market. We will continue to update the Tesla Stock Forecast as we move through this year.
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The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.