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Tesla (NASDAQ:TSLA) stock is currently trading just above $340. Over the past year, the US share has rallied by 66%. Yet this surge hasn’t come without a fair bit of volatility along the way. Therefore, when trying to assess where the stock could go from here, I think it’s worth looking at the forecasts from banks and brokers. Here’s what I discovered.
Interesting takeaways
Tesla is a very popular stock, and this is reflected by the number of different analysts who offer an opinion on it. My research found 70 different share price forecasts from institutions. JP Morgan‘s research team forecasts the price to be at just $115 in a year from now, making it the lowest target price.
On the other hand, Dan Ives at Wedbush has the highest expectation. He has a target price of $500. Needless to say, all of the other contributors are in the band between $115 and $500. Some notable banks include Goldman Sachs at $300, HSBC at $120, and Barclays at $275.
Interestingly, the average target price for the coming year is $302. So, from the current level, this isn’t the most positive view. If accurate, it wouldn’t be a smart move for me to consider buying now at $340. Of course, these forecasts should always be taken with a pinch of salt. The analysts are expressing their opinion, the same as any investor would.
Differing views
Let’s run through both sides of the coin, starting with the reasons why Tesla could rally from here. Tesla continues to lead in EV sales globally, with new ‘Gigafactories’ (Berlin, Texas) expanding capacity. Recently, it launched in India, which is the third-largest market globally and could help to fuel long-term growth.
Further, the business is pushing hard into AI and autonomous driving. Advances in driving software could unlock greater subscription revenue and improve vehicle resale value. Positive regulatory developments around self-driving tech could boost investor sentiment. I believe that’s true for us here in the UK.
However, there are risks involved. Legacy automakers and new EV entrants are scaling rapidly. This is eating away at Tesla’s market share, shown very clearly in places like China. Further, Tesla’s stock is highly sensitive to Elon Musk-related news. His recent moves in politics and other areas have caused controversy that some investors might not be too happy with.
Putting everything together
Although there are some very high share price forecasts from the experts, I tend to agree with the average view of $302. This isn’t from a mathematical point of view, but rather based on my sentiment towards the company. I think the struggles with the Chinese market and the direction of the business under Musk raise question marks going forward.
However, I do acknowledge that the stock is very volatile, so investors with a high risk tolerance may find it appealing.
