Wedbush Securities removed Tesla stock from its list of "best ideas" for 2024 Friday as longtime Tesla bull Dan Ives outlined a number of items Tesla and CEO Elon Musk must address for TSLA to recover.
Tesla stock suffered its worst percentage loss in more than a year Thursday after reporting worse-than-expected fourth-quarter earnings and revenue along with opaque 2024 guidance. On Friday, Wedbush analyst Ives wrote that TSLA will remain off the firm's list of best ideas until there is evidence that Musk and the company takes up their suggestions.
Ives wrote a list of 10 items for "Musk to turn Tesla around." The firm's asks include Tesla to announce a $10 billion share buyback program, to create a holding structure for AI initiatives and give Musk more control, stop vehicle price cuts to maintain margin leverage over other automakers, get assurance Musk will not do more TSLA stock sales to fund X, and to give a "hittable" production and delivery timeline for Model 2 and sub $30k vehicle in 2025.
Ives, who has been one of the most bullish supporters of Tesla, on Thursday called the Q4 earnings a "train wreck." The analyst also cut his Tesla price target to 315, down from 350.
"We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure and fluctuating demand," Ives wrote Thursday.
Tesla stock advanced 0.3% to 183.22 in Friday market action. TSLA stock plunged 12.1% to 182.63 on Thursday, hitting its worst levels since May. TSLA shares are down more than 13% on the week and 26% in January.
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The stock as crashed more than 26% in January so far. Last week, Tesla stock fell 3% for its fifth straight weekly decline. In the last two weeks, TSLA has tumbled below the 50-day and 200-day lines.
Tesla bear J.P. Morgan analyst Ryan Brinkman wrote Friday there is "plenty of further downside potential" to Tesla stock. Brinkman lowered the firm's price target on Tesla to 130 from 135.
Meanwhile, Edward Jones also removed Tesla stock from its "Stock Focus List" Friday, with analyst Jeff Windau downgrading Tesla to hold from buy.
The relative strength line, which tracks a stock's performance vs. the S&P 500, is at a one-year low, according to MarketSmith.
In 2023 Tesla doubled, easily outperforming the broader S&P 500 index despite sliding earnings. However, shares have been falling since late July.
Tesla stock ranks fifth in the 35-member IBD Auto Manufacturers industry group. The stock has a 31 Composite Rating out of a best-possible 99. Tesla stock also has a 24 Relative Strength Rating and a 69 EPS Rating.
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