There are a number of ways to quantify a controversial stock. We look at analyst price targets—which differ widely—and plumb their analysis.
Tesla is a controversial stock. That means investors need to sharpen their pencils and try to understand what analysts are saying—because when controversy is high, the Wall Street consensus doesn’t mean anything.
Potter uses a discounted-cash-flow, or DCF, model to arrive at his price target. A DCF is typically a detailed financial model that forecasts sales, profit margins, and interest rates. It’s a very useful tool for financial analysts, but, as is the case with any model, the more assumptions that go into it, the greater the chance for error.
Potter rates shares the equivalent of Buy. Osborne’s rating is Sell. J.P. Morgan’s Ryan Brinkman, Barclays ’ Brian Johnson, Morgan Stanley’s Adam Jonas, and RBC’s Joseph Spak also rate shares the equivalent of Sell. Adam Jonas is a bear, but less bearish than Osborne, Brinkman, and Johnson. His price target is $740. He values the components of Tesla separately. The car business, for Jonas, is worth $703 a share based on Ebtida multiples. He values Tesla’s potential mobility business—such as autonomous taxis—at $37 a share. He values Tesla’s solar panel and energy storage business at zero.
Ives, for his part, has a $1,250 price target and values Tesla stock at 42 times his 2025 estimated earnings of $30 a share. Wall Street’s 2023 earnings estimate, by comparison, is roughly $24 a share.
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