- Tesla’s earnings report on Wednesday shall be some of the vital moments in its history, Wedbush said.
- Wedbush says Tesla stock has upside in 2023, but Elon Musk needs calm investors over his chaotic Twitter takeover.
- His revamp of Twitter has damaged Musk’s image and the CEO must regain trust.
Elon Musk needs to assuage investors’ fears over his wild Twitter saga as Tesla heads into its fourth-quarter earnings on Wednesday, a moment that marks some of the vital moments within the automobile maker’s history, in response to Wedbush.
“While every quarter is vital for Tesla we might highlight this upcoming call and guidance commentary as some of the vital moments within the history of Tesla and for Musk himself,” Wedbush’s Dan Ives said, noting that Tesla faces higher competition and a more dire macroeconomic outlook than ever before. What’s more, Elon Musk is struggling against his own negative headlines surrounding the Twitter saga, which he can have to deal with for investors to get comfortable with the stock again.
“With all the concerns about Musk’s attention on Twitter, selling Tesla stock, [naming] a brand new CEO, and other noise created by this ongoing soap opera … Elon needs to offer investors comfort around this tight wire balancing act and reiterate his goals for the yr and lay out the strategic vision despite a near-term dark macro,” the note added.
The corporate’s stock tanked 65% in 2022 amid rising inflation, a powerful dollar, and high rates of interest. The sell-off was exacerbated by Elon Musk’s chaotic takeover of Twitter, which involved dumping over $40 billion of his own Tesla shares.
The move has damaged Musk’s personal brand, which in turn, has damaged Tesla’s brand, analysts say. Some Tesla investors have already called for Musk to step away from Twitter or get a brand new CEO for Tesla, showing waning trust within the tech titan as he stays under public scrutiny.
“Musk … has essentially gone from a superhero with a red cape to a villain within the eyes of many investors after the continuing Twitter fiasco,” Ives said.
The Wedbush note added that Musk easing investors’ concerns may very well be a bullish consider tomorrow’s call. The stock could also profit if Tesla addresses how recent price cuts within the US, Europe, and China will affect its profit margins, and if Musk revises Tesla’s 50% growth goal this yr to a more realistic 35%-40%, Wedbush said.
The Wedbush analysts estimated Tesla stock to rally 20% by the tip of the yr to $175. Shares have already rebounded from lows in 2022, gaining 32% year-to-date.
Other commentators remain bullish on Tesla despite its dismal performance in 2022. Canaccord Genuity senior analyst George Gianarikas urged investors to purchase Tesla stock before tomorrow’s earnings call, as many headwinds facing the electrical vehicle maker have already been priced in.