“A Good Entry Point”; Tesla Stock (NASDAQ:TSLA) Jumps as Fundstrat Sees an Opportunity

To look at the news lately, one might think electric vehicle giant Tesla (TSLA) is in a death spiral, with its CEO Elon Musk enraging a sitting president and all. But there are those who believe that this is a new opportunity for Tesla, including some analysts. Investors took the cues accordingly, and shares shot up nearly 6% in Friday afternoon’s trading.

Fundstrat’s head of research, Tom Lee—according to a CNBC report—noted that, while Trump and Musk may be on the outs for now, that does not mean that Tesla itself is a bad investment. In fact, the recent pullback in shares is actually a buying opportunity, the report noted, as now, Musk is less tied to Trump thanks to this very public blow-up.

“In our view, Elon(‘s) actions are now ingratiating him with non-MAGA universe, which is a lot of the USA, and the rest of the world.” Lee noted. Given that, indeed, Tesla had seen quite a bit of backlash as the result of Musk’s connection to Trump, the idea that a public blow-up and break-up might actually turn that prospect around is not out of line. And, despite the notion that Trump could cancel Musk’s various contracts with the United States, that was actually unlikely. Musk provides too many essential services to be readily cut out altogether.

Oh, And the Massive Loss

Though Lee did not specifically mention it, it is worth pointing out that Tesla has seen a staggering loss in recent days. In fact, noted a separate report, Tesla is currently the “…worst-performing large-cap stock this year.” That is not just related to the political issues, but also due to a general decline in the electric vehicle market.

Yet even despite this, Tesla remains the 10^th largest company based on market capitalization as of June 5. So the idea that fixing some of the perceived problems will help turn things around is not out of line, and has already been reflected in today’s price movement. Whether or not that will become a trend, though, remains to be seen.

Is Tesla a Buy, Hold or Sell?

Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 16 Buys, 10 Holds, and 11 Sells assigned in the past three months, as indicated by the graphic below. After a 60.41% rally in its share price over the past year, the average TSLA price target of $284.37 per share implies 5.37% downside risk.

See more TSLA analyst ratings

Disclosure