Some analysts are signaling Tesla's 2023 rally could be losing steam as the EV giant's March 1 investor day approaches. Tesla stock, which had been surging for eight straight days, dropped Friday.
BTIG analyst Jonathan Krinsky wrote Thursday that even for Tesla bulls, current Tesla stock levels "appear overextended." BTIG does not have a rating for Tesla stock, but Krinsky noted a price target of 210-225 seems logical. That is about 5% to 9% above where shares ended on Thursday.
Tesla stock fell 5% to 196.90 Friday during market trading. Until Friday, TSLA shares had gained 68% on the year and was in the midst of a 103% run off of Jan. 6 bear-market lows.
"While we certainly did not anticipate this type of move, at this point we think the rally has largely run its course," Krinsky wrote.
Meanwhile, Tesla CEO Elon Musk has announced his "Master Plan 3," will be presented at Tesla's March 1 investor day. He called the plan the "path to a fully sustainable energy future for Earth,"
CFRA Research also downgraded Tesla stock to a "Buy" rating, down from "Strong Buy" on Thursday. However, the firm did hike its Tesla stock price target to 250, up from 210.
"We continue to view TSLA as a core long-term holding, but recent multiple expansion causes us to move to a Buy," CFRA analyst Garrett Nelson wrote.
"All eyes are on TSLA's upcoming investor day on March 1 and we note that TSLA shares have tended to run-up ahead of such events in the past," Nelson added.
The more cautious analyst notes follow Tesla stock price target hikes from RBC Capital and Wedbush earlier in the week.
RBC Capital analyst Tom Narayan on Monday raised his price target to 223, up from 186 and maintained an "Outperform" rating. Also on Monday, Wedbush analyst Daniel Ives, a longtime Tesla bull, increased his Tesla stock price target to 225, up from 200.
Ives cited China demand "going from a headwind to tailwind" for Tesla. The Wedbush analyst wrote that increased EV demand in China "is just starting to hit its stride and should be a tailwind in 1Q" for Tesla.
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Tesla Stock, Raising China Prices
The major stock market indexes were mixed Friday as investors were disappointed by earnings reports and guidance. Tesla's pullback comes after the broad stock market rally also hiccupped Thursday, reversed lower and undercutting the lows of the prior few days. However, that did not deter Tesla stock Thursday, which continued its 2023 rally.
Tesla stock popped 3% to 207.32, closing in on its 200-day moving average, on Thursday. Shares backed off an intraday high of 214, but that did not stop Tesla stock from surging more 100% from its Jan. 6 intraday low of 101.81.
Early Friday, Tesla raised the base Model Y price in China by 2,000 yuan ($295) to 261,900 yuan ($31,569). That follows a cut of 29,000 yuan on Jan. 6, which were part of sweeping, across-the-board cuts in China and Asia.
The decision to increase China prices comes after Tesla sold 66,051 China-made vehicles in January, a 10.4% increase compared to a year ago and up 18.4% vs. December. Of those deliveries, the global EV giant exported 39,208 vehicles from its Shanghai plant. Tesla is known to focus on exports from Shanghai in the first part of the year.
Tesla's January exports were up 183% compared to December, but down 3% vs. January, 2022. Meanwhile, Tesla delivered 26,843 vehicles in China, down 36% from December but a nearly 39% increase compared to January, 2022.
Musk told investors on Jan. 26 that Tesla saw "the strongest orders year-to-date than ever in our history" in January. Musk added that orders were coming in at "almost twice the rate of production."
Signaling expectations for increased demand, Tesla plans to produce an average of nearly 20,000 vehicles a week at its Shanghai plant in February and March, according to Reuters. The company expects monthly production to roughly reach September levels of 82,000 vehicles.
As of Friday morning, Tesla stock remained 49% below its all time high of 409.97, which it hit on Nov. 4, 2021. TSLA shares were also down 45% from its 52-week closing high of $381.82 on April 4, 2022, according to MarketSmith analysis.
TSLA shares rank fourth in the Auto Manufacturers industry group. Tesla stock has an 68 Composite Rating out of 99. The stock has an 20 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 99.
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