Tesla Stock Forecast 2023: Will TSLA Stock Fall on Monday?
Tesla Stock Forecast 2023: The momentum of TSLA for December 5th, 2022 is Marginally Bullish. The short-term recommendation is Buy.
Tesla Stock Forecast: Tesla Stock Forecast for the next 12 months is $311
Latest Tesla Stock Price
- Last 1 Month: (-14.1%)
- Last 6 Months: (-25.3%)
- YTD: (-51.3%)
Tesla Stock Forecast: Latest News
- Tesla plans to cut its output by more than 20% from its Shanghai plant in December as compared to its November 2022 output. This comes as China has been following a strict Covid Zero policy which has led to protests all over China. The full capacity of the Tesla Shanghai plant is 85,000 per month.
- Startup backed by Tesla, Alef Aeronautics which is working to develop flying cars has said that it plans to begin delivering the first vehicles to customers by the end of 2025. Alef Aeronautics is a California base startup.
Tesla Stock Technical Analysis
RSI and Fear and Greed
Relative Strength Index: Tesla on its last trading day failed to breach $200. The RSI chart shows that Tesla has been below the resistance at 50.18. Currently, the RSI is 48.37 and the bears have gotten involved which may lead to a price pullback. Considering the current RSI, we may see Tesla’s stock price turning negative on Monday’s trading day.
Fear and Greed: The fear and Greed chart of Tesla gives a clear indication of the short-term momentum. Currently, the index is 83.42 which indicates the Extreme Greed zone. In such scenarios, the short-term traders find an opportunity to short the price. We are starting at a price drop for TSLA on Monday.
TSLA stock price did see a surge in the last few trading days but the chart above indicates a pullback. The 50-day moving average is on a descending trend and TSLA price line has now converged with the 50-day moving average. TSLA may see a pull back at this level at $194.89 has been a resistance level for TSLA with support at $180.43.
TSLA might fail to breach this resistance and the price is expected to fall on Monday.
Recommendation: Short-term Momentum is bullish and short-term recommendation is Buy.
TSLA Stock Analysis (Video)
Tesla Price Target: Impact of Twitter acquisition on Tesla Stock
Elon Musk completed the acquisition of Twitter on October 27, 2022, for $44 billion. Wedbush analysts commented that this $44 billion deal will be one of the most overpaid deals in history. Immediately after the completion of the deal, Elon fired the top executives including the CEO.
This deal comes as a relief for the investors who were concerned about the impact of the deal on Tesla stock. Elon sold $15 billion of Tesla’s stock to finance the deal and as the acquisition has now been completed, Elon will not sell any more Tesla stocks. Analysts are expecting to see an increase in the stock price.
However, there are concerns about how Elon will manage running Tesla, SpaceX, Twitter, and his other businesses. Tesla stock whose share price is already down by 43% from the past 1 year and has lost around 34% since the announcement of the deal. Tesla’s market cap has gone down from $1.14 trillion in April to $718 billion today. Also, a noteworthy point is that twitter’s interest rate expenses per year are expected to be $1.2 billion on its debt and with the increasing interest rates, this number will increase. So, Elon’s other primary goal would be to increase revenues and profits for Twitter and analysts also expect that Twitter might not become free cash flow positive until 2025. Twitter is struggling and it requires Elon’s full attention to fix this company. So, Elon’s focus on Tesla may reduce which can affect its future.
Tesla Price Target: Will Tesla Recover?
- Tesla is currently operating at 51.7 PE
- 2023 Sales are likely to be 50% higher
- Analysts are predicting a price target of $299 at the moment (79% higher)
How has TSLA performed in comparison with other EV companies?
Last 1 Month (Post Twitter Takeover)
- Tesla: -20.5%
- Lucid: -19.5%
- Rivian: -9.3%
- NIO: +6.0%
- Xpeng: +2.0%
Ford Stock on the other hand is up 11% in the last 1 month.
Apart from the Chinese EV makers, the others have fallen quite a bit as well. So the Tesla fall cannot be fully attributed to Twitter alone.
Tesla’s market share is down in California, one of its biggest markets globally. Demand for EVs has also eased a little on account of the Global slowdown.
It is likely that the slowdown in Global economies could be a bigger factor for the fall in Tesla’s stock price.
Given all the above information, it is clear that Tesla will recover over the next 8-12 weeks. However, it is unlikely to rise by 70% over the next 12 months on account of slower economic growth and market share losses.
Tesla Stock Forecast: Factors That Can Affect Tesla Share Price in 2023
Elon Musk’s $4B Tesla Stock Sale
According to documents filed with the U.S. Securities and Exchange Commission, CEO Elon Musk sold 19.5 million shares of the electric vehicle manufacturer between November 4 and November 8, for an estimated $4 billion.
This action is consistent with analyst predictions that Musk would have to sell Tesla stock in order to finance his acquisition of Twitter.
This week, Tesla stock has experienced intense pressure, falling more than 5% on Monday and then nearly 3% again on Tuesday following a recall of 40,000 vehicles. According to information from Benzinga Pro, the electric vehicle manufacturer’s shares finished at $191.30 on Tuesday, down 2.9% from the day before.
Attracting Big Crowds at Shanghai Expo
After having recently closed one of its showrooms in Beijing, Tesla had the largest appeal at China’s world’s largest import trade fair. This proves that China still has a lot of appeal for US products. They dominated the China International Import Expo (CIIE) that started in Shanghai, contrary to the fact that their new models were not on display and not available to the buyers.
Analysts like Gary Black have said that this time in Q4, Tesla is going to have good revenues from China which can be seen in the prevailing excitement and buzz around the company in China.
After all, it seems that the geopolitical crisis between the two world powers is not going to stop US firms from capturing the Chinese market just because of the size of the market.
Starting to prioritize Cybertruck and a Tesla vehicle under $35,000
The company has started to hint at the launch of the new Cybertruck in the next year and that being said, Tesla is already late to the party as they are behind Ford Motors and Rivian Automotive in this particular segment. Regardless, this could be a great success looking at the brand loyalty Tesla has right now.
Tesla’s Model S being the start of the commercial vehicle production line, it has been seen that the company only gained good control over the market only after mass producing the cheaper versions of Model 3 sedans which came around 5 years later. The requirement for this is also very high now looking at slow growth and alarming inflations so that customers could afford Tesla at a cheaper price.
Mismatch of Demand and Supply/Production
As the US and other countries battle out recession fears, Tesla Inc cannot be untouched by the possibility of slowing down the demand for its EVs. It was evident in the Q3 2022 results announced on October 19th, 2022. The company posted a total profit of $3.3 billion and $21.45 billion in revenue. But the surprise was that the company produced 22,000 more vehicles than it could deliver.
It signals to some analysts that the company could not maintain demands for its models. However, Elon Musk said that the company expects intense orders in Q4 and to sell all the produced cars. The company attributed transportation issues as the main reason for the shortfall in deliveries which is increasingly becoming expensive.
Tesla management still believes they have a vast supply and aggressively plans to ramp up production in new factories like Shanghai, Berlin, and Austin. Analysts believe that Tesla has not experienced a macroeconomic slowdown of such a large scale since its inception, and present conditions will be the testing time for Tesla Inc, and its approach to better manage the inventory will be key going into 2023.
Operation of Berlin Gigafactory and production of Cybertruck
Elon Musk inaugurated Berlin Gigafactory in April 2022, and the factory was slated to start by the end of 2022 with a capacity of 500,000 Model Y each year. It also can produce 50- Gigawatt hours of rechargeable batteries.
But, now, according to a news report, due to problems in the production process, the new Gigafactory facility will not be able to mass produce electric battery cells at least by 2024. This news will hurt the possibility of reaching the production of 500,000 annually anytime soon. It is some bad news for Tesla investors.
Also, Tesla’s most anticipated model Cybertruck was expected to be in mass production by the end of 2022. But, still, there is no confirmation. Although some drone pictures claim to have spotted prototypes of Cybertruck in the Texas Gigafactory, where they are scheduled for production, Tesla’s management has not yet confirmed the same.
Tesla has over a million backlog orders for Cybertruck, and the company is way behind schedule. If production starts in 2023, it will be a big boost for the company and add to revenue and profits. But otherwise, it will a dent in the image of Tesla Inc.
Tesla Stock Prediction: Dependence on China
Clocking record volumes in China around Q3 of 2022, it’s pretty much clear that the dependence on Tesla in China is increasing day by day. According to the data from Gasgoo reports, China was behind 55% of Tesla’s total delivery volume which as compared to the previous quarter was up by 15%. But this surge was mostly due to the new rise in exports in Q3 and the contrasting thing is the revenue growth rates are not able to keep pace with the delivery volumes. Statistically, the revenues grew just 36% as compared to the growth in volumes which was around 67%.
So, the two main factors playing a crucial role here are the fall in the average selling price of the cars and the weakening yuan. These factors are gonna play an even larger role moving into Q4. Yuan being at 15 year low is not going to ease up revenues for Tesla anytime soon. Yuan weakened around 3.7% in the third quarter as compared to the second and now it’s at an alarming ¥7.31 and will have to come back to around ¥6.5 in order to negate any crucial forex impacts on the revenues of Tesla. Price cuts to around 9% percent have also been made in China which will affect the revenues being generated from China heavily in Q4.
The Future of Self-Driving Vehicles
Tesla is one of the pioneers in giving its buyers access to self-driving capabilities. Elon Musk has increased the charges for receiving complete self-driving updates to $15,000. The price has increased from $10,000 at the beginning of 2022 to $15,000. Tesla believes getting regulatory approval for a self-driving vehicle can charge up to $100,000 or more from vehicle purchasers. The discounted price at present reflects the absence of statutory approval.
Elon Musk promised investors that the full self-driving (FSD) feature would be available by the end of 2022, but that hasn’t happened. It is expected to be available in 2023 and could open a new revenue stream for Tesla Inc.
Elon Musk promised investors that the full self-driving (FSD) feature will be available by end of 2022, but as usual, these are false promises. Now, it is expected to be available in 2023 and that could open a new revenue stream for Tesla Inc.
Tesla Stock Prediction for the next 12 months
|Average TSLA Stock Forecast for the next 12 Months||$299|
Tesla Stock Predictions for the next five years
|Tesla Stock Prediction 2023||$494|
|Tesla Stock Prediction 2024||$693|
|Tesla Stock Prediction 2025||$1075|
Q4 Option Analysis
The data about Q3 tells us that right before the results were announced, the implied volatility (IV) in the options market peaked at around 75%, and then it came down very sharply to around 55% which is practically the lowest level in a year’s span. This tells us that when we will be approaching Q4, this game will still be played and there’s a way to be profitable in such cases.
For example – let’s assume the February 17th 225 Strike price which is currently valued at $31. This is around 13% of $225. Considering a situation where one is to write the put option and the stock will surge above $225 on the 17th of Feb, we will be making a whole of 13% in around 100 days which is considered a good percentage return as the EPS forecasting is on the up only for Q4.
On the contrary, if we have to see that Tesla will go below $225 on the 17th of Feb, then the put option will have to be executed making us buy the stock around $195 dollar considering that $190 is a very strong resistance for Tesla for the time being. And hence then this could be converted to a long-term trade for hold and hence earn returns.
TSLA Stock Forecast: Is Tesla a good stock to buy?
Yes, Tesla is a good stock to buy. Here is what is going in favor of Tesla
- Outstanding R&D and Execution capability. The company has delivered numerous innovations and has produced its way around chip shortages quite efficiently. Tesla managed Chip shortages by replacing the chips with substitutes and rewriting its firmware. This enabled Tesla to manage production way more efficiently than most Manufacturers.
- Twitter Inc is just a legal case and won’t hog Musk’s time: While there was a legitimate concern around how much time Musk would give Twitter, with him pulling out of the deal, Musk’s attention will not be divided away from Tesla and SpaceX
- With the stock split, TSLA is much more liquid now and available at a lower price (if not value). It has strong institutional support as well.
- EV as a sector will continue to grow and Tesla will be a huge beneficiary.
Here are other specific Positive and negative factors
- Starlink Project: For the past many years, Elon Musk has been working on the Starlink project with the intention of providing internet to the remotest space on earth by a network of private satellites in the orbit. It picked up pace in 2021, and Starlink now has more than 2000 satellites to boost. Musk Tweeted that TSLA shareholders may benefit from the Starlink IPO.
- China: China is a huge market for Tesla and EVs in general, and according to estimates, China will represent 40% of deliveries for the EV maker in 2022, contributing nearly $400 to its share price. If China’s market is handled properly, it could be a big tailwind for Tesla.
- Gigafactories in Berlin and Austin: The new gigafactories in Berlin and Austin in 2022 will provide a big boost to production.
- Interest rates and other economic factors: The Fed has twice increased rates even as there are no signs of the global economy recovering soon. While US inflation may continue to fall, an escalation in Ukraine could pose a huge risk to Global economies.
- Competition: While Tesla is the undisputed leader of the EV market in the world, a range of competitors are lined up to take a bite out of Tesla. Ford, NIO, LUCID, and VIVIAN to name a few.
- Regulations, fees, and fines: Lately, Tesla has not been a darling of regulators, and heading into 2022, it could mean trouble for Automaker. There may be various fines and fees involved and potential scrutiny in the expansion plans of Tesla, as China’s plan is not liked by many in the US and increased regulatory scrutiny affects the cash flow and production efficiency, to say the least
Tesla Q3 Deliveries
- Total Deliveries 343,830 units, below Wall Street Estimates
- Production was 365,923 units.
Tesla Share Price Forecast: Q2 Results
- Total deliveries are up 27%, Model S/X deliveries are up 753%, Model 3/Y deliveries are up 20%
- Q1 Revenue is up 42%, and regulatory credits are down 3%
- Q1 revenue excluding regulatory credits is up 43%
- Adjusted EBITA is up 52%, Adjusted EBITA margin is up 159bp
- Free Cashflow is up 0%
Tesla Stock Forecast Today
|1. Market's Wisdom||Partially Positive|
|1a. Market Data||Partially Positive|
|1b. Technical Recommendation||Neutral|
|2. Crowd's Wisdom||Neutral|
|2a. Social Media Buzz||Neutral|
|2b. Social Media Sentiment||Neutral|
Tesla Stock Forecast 2023: Should you buy Tesla Stock?
Tesla has underperformed in 2022, with share price being about 46% lower since the start of the year. The main reason is Tesla shares are “expensive” in this high-inflation market. There were also issues in the supply chain, increasing production costs and below-par deliveries.
But a significant reason is also undelivered promises from CEO Elon Musk. A lot of promises are again made for 2023, and it will be again a test for the CEO to live up to the expectations. But Tesla is still not on the buy list for 2023, simply because it is overvalued and with a concrete future as long as Elon Musk does not lead from the front.
Please do your own research before any investment decision.
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.