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The Austin, Texas-based Tesla, Inc. (TSLA) is a global leader in electric vehicles and clean energy solutions with a massive market cap of around $740.1 billion. Operating in the automotive and energy sectors, the company designs and manufactures electric vehicles, energy storage systems, and solar products, focusing on innovation and sustainability.
Shares of Tesla have significantly underperformed the broader market over the past 52 weeks. TSLA has declined 11.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.5%. In 2024, shares of TSLA are down 7.1%, compared to SPX's 15.8% gains on a YTD basis.
Zooming in further, TSLA has lagged behind the S&P 500 Cons Disc Sector SPDR's (XLY) 9.5% gains over the past 52 weeks and a 5.2% increase on a YTD basis.
Tesla has been underperforming due to heightened competition in the EV market, which has impacted its market share and made its models seem outdated compared to newer rivals. Also, significant price cuts to boost sales have led to a notable erosion of its profit margins.
However, the stock rebounded 4.2% on Jul. 31 after a recall of 1.85 million vehicles, as only about 1% were affected, and the issue was addressed with over-the-air updates. The stock gained traction as investors focused on Tesla’s $600 million investment in AI and its advancements in self-driving technology and humanoid robots.
For the current fiscal year, ending in December, analysts expect TSLA's EPS to decline 31.2% year over year to $1.79. The company's earnings surprise history is mixed. It met the consensus forecast in one of the past four quarters while missing on three other occasions.
Among the 34 analysts covering the stock, the consensus rating is a “Hold.” That’s based on eight “Strong Buy” ratings, two “Moderate Buys,” 16 “Holds,” and eight “Strong Sell.”
This configuration is more bullish than three months before, with seven analysts suggesting a "Strong Buy."
Despite Wall Street’s overall cautious stance on TSLA stock, Morgan Stanley's (MS) analyst Adam Jonas named Tesla the new “top pick” in the U.S. auto sector On Jul. 29. The analyst reiterated a "Buy" rating on the stock with a price target of $310, which is also the Street-high target for the stock.
This new target implies a modest potential upside of about 33.6% from the current price levels. As of writing, TSLA stock is trading above the mean price target of $196.68.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
