Tesla too expensive? What analysts think and how investors can now position...

Tesla too expensive? What analysts think and how investors can now position themselves


Only with very few companies ​​from the NASDAQ 100 do the analyst opinions differ as much as the electric car pioneer Tesla. In doing so, the stock offers sufficient opportunities for risk-averse investors in their current valuation.

In viewing the chart, it seems Tesla share price does not look very bright at the moment. The chart of the electric car maker is currently weak. Since reaching the all-time high at the end of June 2017, the stock has not been able to continue its upward trend. Now there is some evidence that the stock is heading into a possibly short-term downtrend. This, however, could soon lead to a sudden reversal and distinctive support zones can be identified. For example, the stock hits around USD 309.00 on a support line that could stop the short-term downtrend of the stock. Thus, it appears to be quite possible that the stock will have to lose further in the coming trading days. In order for the Tesla shares to reach their possible support zone, the price per share would still fall around ten percent.

Analysts also offer differing perspectives on the Tesla share. Berenberg published a surprising price target of USD 464.00 per share. Berenberg analyst Alexander Haissl believes that Tesla has the potential to turn the entire automotive sector upside down and continue to increase vehicle sales. In addition, Haissl still sees potential for around 35 percent higher prices.

“Tesla’s disruptive potential encompasses the vehicle, the entire production process and the product-to-market strategy. Once the business reaches scale, the cash generation potential is significantly superior to existing premium OEMs,” he wrote.

The analyst David Tamberrino from Goldman Sachs has a completely opposite opinion. He sees the fair value of the share at only USD 190.00 and thus about 45 per cent below the current level. Tamberrino assumes that the company’s gross maturities are likely to fall in the future, and the current market expectation is therefore far too high. Furthermore, the sale of the new Model 3 will be at the expense of the sales of the more profitable Model S.

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Brayden Fortin is a American with numerous years of investment experience in the American Equity Market and in the Global Commodity Market. He has a B.Com degree from a well respected Canadian university and has experience working in the wealth management industry. He is interested in delving into numbers to analyze companies and markets. He won a couple of international strategy simulation competitions involving decision making through numerical analysis, and also scored in the top 50 on the Bloomberg Aptitude Test (out of nearly 200,000 test takers).