Elon Musk's $700 billion crash prompts both bulls and bears in the price of Tesla. What Morgan Stanley, Citi and others say could happen next


Wall Street is starting to declare enough is enough after the market value of Tesla shares plummeted by about $700 billion from its peak a year ago.

Even a well-known Tesla bear has raised the stock from "sell" to "neutral," claiming that it has most likely bottomed.

The year-to-date decline, according to Citi analyst Itay Michaeli, "we feel has balanced out the near-term risk/reward."

Following are the most recent remarks made about Elon Musk's Tesla by companies including Citigroup, Morgan Stanley, and Wedbush.

Citigroup analyst Itay Michaeli

Michaeli upgraded Tesla stock in addition to raising his price objective from $141.33 to $176, however, the new number is still behind where shares most recently traded as they increased 8% to reach $183 on Wednesday.

"To be sure, macro/competitive concerns are likely to continue to be a burden as capacity rises, but as we've previously written, in a hard landing scenario Tesla's competitive position likely also improves and may be further enhanced by [President Joe Biden's inflation reduction act]," the report reads.

Morgan Stanley analyst Adam Jonas

Tesla bull Jonas, meanwhile, said in a note on Wednesday that shares were getting close to his $150 "bear case" price estimate, suggesting a potential buying opportunity at a significant discount.

He has a $330 price target and an "overweight" rating on Tesla shares. Tesla should boost sales by 37% next year, generate $15 billion in free cash flow, and maintain its position as the top producer of electric vehicles, according to Jonas, even while the purchase of Twitter continues to be a distraction for Musk and a possible concern for investors.

The "gap-to-competition" between Tesla and its rivals, he added, "may possibly expand, particularly when EV pricing flip from inflationary to deflationary." We think Tesla is by far the best-positioned OEM with regard to the (inflation reduction act) in terms of possible eligibility for consumer tax and production credits.

CEO of Ark Investment, Cathie Wood

Before its stock split this year, Wood, a Tesla extreme bull, set a price objective of $4,600. She reaffirmed her optimism in a Tuesday interview with Bloomberg TV.

"Aren't you scared about Tesla, many people ask. Because of our work on electric cars, no, we're not. They are taking an excessive amount of market share and will keep doing so; according to our projections, this market will account for 85% to 95% of all automobiles sold globally by 2027. That is operating automatically. Elon Musk is presently working on driverless vehicles, which we believe will succeed."

"We believe Tesla will approach [autonomous driving] in a much broader way."

Wedbush analyst Dan Ives

Ives, a longtime bull, has recently been less enthusiastic after dropping Tesla from Wedbush's list of "best ideas" earlier this month owing to the purchase of Twitter.

He elaborated on the "Twitter overhang" as a danger to Tesla shares in a fresh note:

The issue is that Tesla's stock continues to have a genuine overhang caused by the perception of "key person risk" with Musk while the PR Twilight Zone of Twitter continues to play out in front of the world and sponsors stay away.

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