Shares of Tesla Inc. is entangled in a sell-off in technology as well as a number of other companies and industries, but that doesn’t mean investors should shy away from the “very attractive entry point” that the pullback has created.
That’s from CFRA analyst Garrett Nelson, who said in a note Tuesday that although Tesla
shares “recently sold,” the company is “one of the market’s most compelling growth stories – an investment with the same long-term payback potential as tech disruptors.” like (Apple Inc.
) or (Amazon.com Inc.
) many years ago.”
Tesla stock has lost 44% this year, compared with a roughly 21% drop for the S&P 500 index.
But it’s still the best-performing automaker stock in Nelson’s displays, with other major automakers falling about 52% on average, the analyst said.
“Tesla was unfairly punished by the market and the company was not credited for some of the key positives in the story,” said Nelson.
That includes “exceptional” earnings and operating performance, potential production growth from the company’s new plants in Austin, Texas and in Berlin, Germany, and “improved balance sheets.” substantial and an impressive future product delivery system”.
Markets may also be underestimating the role of record-high gasoline prices in driving electric vehicle sales, he said. Tesla could also surprise the market by bringing its Cybertruck electric pickup truck and Semi commercial electric truck to market earlier than expected, Nelson said.
As of now, Tesla stock is down 33% in Q2 and has lost about 30% since the CEO’s arrival. Elon Musk has bid on social media company Twitter Inc.
In his note, concerns that Twitter would be “too distracting” for Musk and Tesla were “overblown,” Nelson said in his note. Musk has surrounded himself with a “highly capable” executive team at Tesla and has been able to balance growth at both Tesla and space company SpaceX for several years, along with his other companies, analysis said.
Musk talked about the state of the US economy and the possibility of a recession. Earlier on Tuesday, The Tesla CEO said that a recession “is inevitable at some point.”