Tesla broke its string of five consecutive declines on Wednesday, but came off highs late in the day as reports emerged that Chief Executive Elon Musk plans to spend the next four months working at the Department of Government Efficiency, known as DOGE, as he aims to cut $2 trillion from the federal budget.
Tesla stock is in a sharp downturn — off more than 7% this week and down around 30% since hitting an all-time high in December. However, a firm initiated coverage of Tesla early Wednesday with a buy rating and a price target representing 45% upside compared to current trading levels.
Benchmark analyst Mickey Legg initiated coverage of Tesla on Wednesday with a buy rating and a 475 price target, citing growth opportunities in autonomous vehicles and robotics along with energy storage.
Legg added that "the release of more affordable Tesla models in 2025" is a "key catalyst for the stock."
"The company has outlined a path for growth with a more affordable vehicle scheduled for the 1H2025, unsupervised full self-driving as a paid service this June in Austin, TX, and Optimus robot production ramp through 2026 and beyond," Legg wrote Wednesday.
The bullish analyst note comes as Oppenheimer analysts on Tuesday wrote they see "increasing risks" to Tesla estimates as electric vehicle and autonomous vehicle "competition intensifies." The firm also believes Musk's political activity "risks alienating consumers and employees as the Trump administration tests the limits of its power."
Meanwhile, Stifel analyst Stephen Gengaro on Monday dropped his Tesla stock price target to 474 from 492 while maintaining a buy rating on the shares. Gengaro cited Tesla's Q4 results, uncertainty caused by President Donald Trump and Musk's political involvement with the Trump administration as reasons for the price target cut.
TSLA on Wednesday jumped 2.4% to 336.51, hitting an intraday high of 346.40, during stock market action. The stock retreated from that high as news broke that Musk will be focused on DOGE for the coming months.
On Tuesday, Tesla stock sank 6.3% to 328.50, its lowest since late November. The stock sold off last week, and has now broken decisively below a recent consolidation.
Tesla Stock Performance
With Tuesday's decline, Tesla stock now no longer has a valid base and is in a sharp downturn after slipping 10% last week. Shares are now more than 30% below that traditional 488.54 buy point and record high from Dec. 18, according to MarketSurge charts.
Tesla stock has dropped since hitting resistance on Jan. 31 at a downward-sloping trendline. Investors who bought on the Nov. 6 postelection breakout have seen the bulk of a scorching hot 200-point gain disappear — mostly since the end of January.
As a result, the relative strength line for Tesla stock is at a three-month low.
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Tesla stock ranks third in the 35-stock IBD Auto Manufacturers industry group. The stock has an 80 Composite Rating out of a best-possible 99. Shares also have a 93 Relative Strength Rating and an 83 EPS Rating.
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