November wasn't very kind to Elon Musk.
The Tesla (TSLA) CEO had just completed his $44 billion acquisition of Twitter, an extremely public months-long saga of charges, countercharges and lots of bad karma.
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The seemingly endless drama prompted longtime bull Dan Ives of Wedbush to declare the Twitter takeover an "albatross" around Tesla's neck and boot the electric vehicle maker off his "Best Ideas" list.
"In what has been a dark comedy show with Twitter, Musk has essentially tarnished the Tesla story/stock and is starting to potentially impact the Tesla brand with this ongoing Twitter train wreck disaster," Ives wrote back on Nov. 10.
The analyst noted that Tesla’s stock had tanked after the deal closed, adding that "in this white knuckle backdrop, the constant selling of stock (when he said it was done) is an agonizing cycle for investors to navigate."
"More worrying is that this Twitter 'Money Pit' situation will never end and continue to take up money, time, and attention from Musk instead that could be focused on Tesla," Ives said.
Raise Tesla's Price Target
Although the analyst said his longer-term view of Tesla was generally unchanged, he warned of "a very nervous few months ahead for Tesla investors as they remain the ones that have been punched again and again by the Musk Twitter antics and the stock now is deep in the investor penalty."
But now June is busting out all over and Ives has a different tale to tell.
Tesla added to a string of daily gains Friday after the biggest EV manufacturer on earth cut a deal enabling General Motors GM car owners to use its network of charging stations.
The partnership, which follows a similar deal with Ford Motor (F) last week, means all three U.S. automakers will now use the same network of 12,000 fast chargers based on the Tesla North American Charging Standard, which comprise around a third of U.S. charging stations.
There's no more talk of albatrosses or money pits or train wreck disasters. Ives was accentuating the positive and eliminating the negative in his June 9 note to investors.
Ives boosted his price target for Tesla from $215 to $300, reiterated his outperform rating, and put the company back on the Best Ideas list "as Wall Street starts to better recognize the underlying value in the Tesla EV ecosystem into 2024 and beyond."
The analyst said the sum-of-the-parts story for Tesla now “further comes into play with its supercharger network, energy business, AI driven autonomous path, unmatched battery ecosystem, and increased production scale/scope globally adding to the Tesla golden EV success story still in the early days of playing out with customers.”
'Building the EV Castle'
Ives also believes Tesla is seeing steady demand post price cuts in the U.S. and China with margins now in stabilization mode that should bottom over the next one to two quarters.
"In a nutshell, Musk and Tesla are playing chess while other automakers are playing checkers in this broader EV green tidal wave," the analyst said.
Ives estimated that Ford and GM combined could add another $3 billion to services EV charging revenue for Tesla over the next few years “in another accretive poker move by Musk & Co.”
From GM’s perspective, the analyst said move will aid the company's objective to expand charging access to more than 134,000 chargers available to GM EV drivers through the company's Ultium Charge 360 initiative and mobile apps.
“Battery production out of Nevada remains a strategic advantage for Tesla and the move to 4680 battery cell production will be another checkmate win for Tesla in this EV arms race,” Ives said.
The production and launch of the Cybertruck later this year will also add to the Tesla growth story, the analyst said, "with another few new models on deck including what we believe is a sub $30k vehicle."
"In a nutshell, Tesla is in a massive position of strength after building its EV castle and now is set to further monetize its success," Ives concluded.
