Jeremy Siegel, Paul Krugman, Cathie Wood – Next What’s

  • Tesla’s stock has had a rough start to 2023 after a terrible year that saw it crater 65%.
  • The EV maker faces falling demand in China and elsewhere, as well as Elon Musk’s Twitter saga.
  • Paul Krugman, Jeremy Siegel, Cathie Wood and others think about what happened and what it means for sharing.

Shares of Tesla are off to a bad start this year after suffering a terrible 2022, as the luster increasingly rubs off on Elon Musk’s once-stalwart automaker.

Shares of the electric car company fell more than 12% on the first trading day of the new year after missing fourth-quarter delivery targets.

The recent declines are on top of Tesla’s unprecedented 65% drop in value in 2022, shedding more than $900 billion in market value from peak to bottom. Shares fell 40% in December alone.

The decline followed CEO Musk’s takeover of Twitter as shareholders worried that his new acquisition would distract him from Tesla. At the same time, the automaker is grappling with falling demand, tougher U.S. rules on EV loans and a production slowdown in Shanghai as worker COVID-19 infections rise.

Here’s what eight Wall Street experts and influential market voices have to say about what’s going on at Tesla and its stock.

Paul Krugman, Nobel Economist: Musk’s support for MAGA is a marketing mistake

“Tesla’s customer base, then, is a brand largely made up of affluent cultural liberals, and partly because of the personality embraced by Elon Musk,” Krugman wrote in the New York Times.

“All that said, Musk’s public acceptance of MAGA conspiracy theories is an almost unbelievably bad marketing move, practically designed to alienate his core buyers.”

Musk has been heavily involved in politics since buying Twitter, and experts say he’s fueled right-wing views.

Jeremy Siegel, Wharton professor: Tesla’s price is too high

“The problem with Tesla was always the price, and I think that’s the bottom line,” Siegel said, referring to the EV maker’s valuation — a calculation of how much the company and its stock are worth.

Its valuation peaked at a forward price-to-earnings ratio of 180 times at the end of 2021, when it started generating revenue. It is currently trading at around 25 times its all-time low.

“Every stock that’s sent more than 50 times has underperformed going forward. It’s the price, not the company, that’s causing investors problems,” Siegel said.

Cathie Wood, CEO of ARK Invest: Tesla will bring customers back with price cuts

Wood, a Musk fan, said Tesla shares have “miles to go” and could rise to $1,500 in the next five years.

“I think there are people who won’t buy his cars now,” Barron said in an interview, referring to the price cuts on Tesla models.

“But if he does what we think he’s going to do on the spending side, there’s a lot of people who will use the economy as a guide … and I think there’s more people around Twitter than those who object.”

Dan Ives, Wedbush analyst: Musk needs to reveal these 3 things

“Simply put, this is a fork in the road year for Tesla, one that will either set the stage for its next chapter of growth, or Musk will continue to slide downward,” he said. On a note he set a price target of $175.

“But now Musk & Co. need to come up with: 1) 2023 target and delivery numbers that can be hit by a solid margin, 2) stop the stock selloff and document it in the next earnings call, and 3) finally name a new Twitter CEO. Focus around Tesla the risks of distraction/distraction begin to diminish.”

Edmunds analyst Ivan Drury: Obviously, Tesla is just another car company

According to Drury, Tesla once struggled to meet demand, but is now using typical industry tricks to solve inventory problems.

“These are all very normal problems, but the difference is that Tesla is breaking all the rules,” he said. “Now we’re seeing all their automakers fall into the same traps.”

The analyst believes that Tesla will lower prices further. “It’s a company that’s racing to be different. But now it looks like they’re going to be the same as everyone else,” he said.

Marco Iachini, Vanda research analyst: Individual investors are dumping stocks

“We are seeing the first signs of retail exhaustion at TSLA,” Iachini said in a weekly update.

As Tesla’s stock rallied on Wednesday, individual investors failed to rally. “Already buying shows that a significant number of retail traders took advantage of yesterday’s rebound to exit TLSA positions.”

Individual investors bought more Tesla stock in the past six months than in the previous five years — so the recent selloff has taken a serious hit. “This group is certainly feeling the pinch from last months’ drop to $113/sh,” he said.

Morgan Stanley strategist Adam Jonas: Bet on Tesla to win the electric car race

“Between a deteriorating macro backdrop, record high disincentives and increased competition, there are hurdles to overcome. However, we believe that in the face of all these pressures, Tesla will use its value and pricing to increase its leadership in the EV race. It has scale advantages to outpace the competition,” Jonas said. in the note.

Fundstrat strategist Mark Newton: It’s too early to call a bottom

“We’re all, or most of us, on top of what Musk is trying to do,” Newton told CNBC.

“Obviously, the stock has gone down a lot in a very short period of time. I just think it’s a very risky time for those with short time frames to get in and buy,” he said.

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