{"id":37412,"date":"2022-12-02T12:04:08","date_gmt":"2022-12-02T17:04:08","guid":{"rendered":"https:\/\/autosector.com\/?p=37412"},"modified":"2022-12-02T12:04:08","modified_gmt":"2022-12-02T17:04:08","slug":"tesla-stock-upgraded-long-term","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=37412","title":{"rendered":"Tesla’s Stock Upgraded On Long-Term Position"},"content":{"rendered":"

This article comes to us courtesy of\u00a0EVANNEX<\/a>, which makes and sells aftermarket Tesla accessories. The opinions expressed therein are not necessarily our own at\u00a0InsideEVs<\/a>, nor have we been paid by\u00a0EVANNEX\u00a0to publish these articles. We find the company’s perspective as an aftermarket supplier of Tesla accessories interesting and are happy to share its content free of charge. Enjoy!<\/em><\/p>\n

Posted on<\/span>\u00a0EVANNEX on November 29, 2022,\u00a0by<\/span>\u00a0Peter McGuthrie<\/p>\n

Tesla\u2019s stock is among many that have had a rough year in the face of the current bear market. But some investors see the company\u2019s shares trading at low prices as an opportunity, while one analyst even upgraded Tesla\u2019s stock ahead of the coming holidays.<\/p>\n

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Above: A Tesla logo on a vehicle. Photo:\u00a0Li Xiang<\/a>\u00a0\/ Unsplash
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Citi Research analyst Itay Michaeli upgraded Tesla\u2019s stock from a Sell to a Hold rating in recent weeks, as detailed by\u00a0Barron\u2019s<\/em><\/a>. Although the analyst may not have upgraded it to a Buy, it\u2019s an important shift for Tesla<\/a>, as its stock has fallen by about 45 percent since the middle of October \u2014 causing the company\u2019s market capitalization to drop by over $400 billion.<\/p>\n

Michaeli made the upgrade on\u00a0Tesla\u2019s long-term position<\/a>\u00a0in the emerging electric vehicle market, as most companies are just beginning to unveil their first few EVs. Still, Michaeli cautions investors as to continued concern over increasing competition in the sector, even with Tesla being well-poised to handle it.<\/p>\n

\u201cWe feel that some of the prior baked-in expectations that we didn\u2019t agree with are out of the stock,\u201d wrote Michaeli in his upgrade report. \u201cTo be sure, macro\/competitive concerns are likely to remain an overhang with [EV] capacity rising, but as we\u2019ve previously written, in a hard [economic] landing scenario Tesla\u2019s [long-term] competitive position likely also improves.\u201d<\/p>\n

Some of the aforementioned competition comes from small startup EV companies such as Lucid and Rivian, which Tesla CEO\u00a0Elon Musk<\/a>\u00a0warned earlier this year were both tracking toward bankruptcy.<\/p>\n

For smaller companies like these that need external capital to keep up, a recession could make it difficult to compete with Tesla, which generates free cash flow and has developed at-scale manufacturing. Even traditional automakers may struggle with the need to reallocate current cash flow toward developing EVs and battery supply chains, while Tesla is already several years in.<\/p>\n

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