Tesla’s (NASDAQ:TSLA) recent selloff in the market is creating a “generational investment opportunity” as the company has one of the most compelling growth stories today. The comments were recently made by CFRA analyst Garrett Nelson in a note to clients.
Nelson noted that Tesla, which is the undisputed leader in electric vehicles today, has long-term potential that is not unlike some of the most notable technology disruptors like Apple and Amazon several years ago.
The analyst also noted that Tesla has been “unfairly punished” amidst a broad tech selloff, recession fears, Covid-19-related production challenges, Elon Musk’s efforts to acquire social media platform Twitter, and the effect of rising competition and costs on Tesla’s earnings.
“Tesla has been unfairly punished by the market and the company is not being given credit for several key positives in the story,” Nelson noted.
Nelson listed several of Tesla’s key positives, which include the company’s new electric vehicle factories and its compelling lineup of upcoming products.
“In our view, these factors have overshadowed several key positives in the Tesla story: exceptional operational and earnings execution, future production growth from the recent startup of the Austin and Berlin factories, dramatic balance sheet improvement, and an impressive pipeline of future products,” Nelson wrote, according to MarketWatch.
Nelson added that in the long term, his Tesla price target of $1,200 per share — which already represents a 69% upside from TSLA stock’s closing price of $711.11 yesterday — will actually be conservative.
Tesla stock has seen some notable challenges this year, with shares being down over 30% this year so far, as compared to the 21% drop in the S&P 500 Index. Despite this, Nelson noted that Tesla is still among the auto industry’s best-performing stocks today, as other major carmakers are down on average about 52%.
Disclaimer: I am long TSLA.
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