Tesla (NASDAQ:TSLA) stock rebounded strongly, gaining about 96% so far this year. However, the EV (electric vehicle) giant’s rally has led several top Wall Street analysts to downgrade the stock to Hold. Nonetheless, its solid monthly auto sales, industry-leading margins, incremental IRA credits, and the EV industry embracing Tesla’s charging port standard augurs well for long-term growth.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Top Wall Street Analysts Downgrade Tesla Stock
As Tesla stock rose swiftly recently, top Wall Street analysts, including Mark Delaney of Goldman Sachs, Adam Jonas of Morgan Stanley, and Dan Levy of Barclays, recently downgraded Tesla stock to Hold.
Before moving ahead, investors should note that TipRanks identifies the top Wall Street analysts per sector, per timeframe, and against different benchmarks. The ranking reflects an analyst’s ability to deliver high returns through recommendations. Following the ratings, TipRanks’ algorithms calculate the statistical significance of each rating, the analysts’ overall success rate, and the average return.
While these analysts remain bullish about TSLA’s long-term prospects, the recent rally indicates that positives are reflected in Tesla stock, with its valuation offering a balanced risk-reward profile near the current levels.
In a note to investors dated June 25, Delaney said that Tesla is poised to grow in the long term due to its market leadership in the EV and clean energy space. However, the analyst believes that these positives are “now better reflected in the stock.”
Meanwhile, Barclays analyst Dan Levy sees the growth in TSLA stock as “too sharp relative to challenging near-term fundamentals.” However, the analyst is optimistic about the company’s long-term prospects.
Is Tesla Still a Good Stock to Buy?
The ramp-up in production and delivery, financial benefits from the growing NACS (North American Charging Standards) adoption (supercharging opportunity), recovery in margins, as well as the launch of the Cybertruck and a more affordable model bode well for growth. Further, progress with FSD (full self-driving) and AI (artificial intelligence) products could further boost its financials and stock price.
However, near-term margin headwinds keep analysts cautiously optimistic about Tesla stock.
From top analysts, TSLA stock has seven Buys, nine Holds, and one Sell recommendation assigned in the past three months for a Moderate Buy rating. Further, the average TSLA stock price target of $214.60 implies 12.4% downside potential from current levels.
