Tesla (TSLA) Stock Falls 6% as Post-Election Rally Stalls
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Tesla (TSLA) Stock Falls 6% as Post-Election Rally Stalls

Story Highlights

Shares of the electric vehicle maker might have now entered overbought territory.

The post-election rally in Tesla (TSLA) stock seems to have run out of steam as the electric vehicle maker’s share price is down 6% on November 12.

To be sure, the sudden drop in TSLA stock comes after a blistering rally that saw the company’s share price jump 31% since the U.S. election was held on November 5. The company’s market capitalization rose nearly $350 billion and topped $1 trillion.

The electric vehicle maker and its CEO Elon Musk as seen as big winners from Donald Trump’s re-election. Analysts say they expect the relationship between Musk and Trump to produce benefits for Tesla over time, with Wedbush analyst Dan Ives estimating that Trump’s return to the White House will add $50 to Tesla’s share price.

Tesla’s Outlook

Analysts at Deutsche Bank (DB) have said that Tesla could benefit moving forward from less regulations on both electric vehicles and self-driving cars, higher tariffs on imports of Chinese electric vehicles, and Musk having a direct line into the White House.

However, not all analysts are bullish on Tesla’s prospects under a second Trump administration. Media reports note that Trump’s pick to lead the Environmental Protection Agency (EPA), Lee Zeldin, is a climate change skeptic and that could spell trouble for electric-vehicle makers and other green technologies.

Still, other analysts say that the rally in Tesla stock is taking a breather as it enters overbought territory. TSLA stock is up 33% this year, with nearly all of those gains coming in the past week.

Is TSLA Stock a Buy?

Tesla stock currently has a consensus Hold rating among 35 Wall Street analysts. That rating is based on 11 Buy, 16 Hold, and eight Sell recommendations made in the last three months. The average TSLA price target of $207.83 implies 37.10% downside risk from current levels.

Read more analyst ratings on TSLA stock

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