Tesla Inc. (NASDAQ: TSLA) shares have escalated dramatically over the past six months. The company's shares have increased by 116% in that time period, peaking earlier this month at an all-time high of $572.20. Despite the outstanding performance, analysts continue to have mixed outlooks.
Based on 24 analysts with a 12-month price target, the average price target is $421.48 with a high forecast of $800 and a low forecast of $44, according to TipRanks. The average price target represents about a 26% decrease from current levels.
Here is a bullish and bearish argument from two analysts.
The Tesla Bear
On Jan. 16, Morgan Stanley analyst Adam Jonas downgraded Tesla's stock to Underweight with a price target lowered to $360. Jonas based his downgrade on valuation and thinks risks to the long-term Chinese business may not be fully appreciated by the market.
"Investors will be presented with more attractive opportunities to own the stock in the future” the analyst wrote in a note.
“While the company can enjoy strong growth," Jonas said, "I anticipate significant earnings volatility and a ramp in capital spending. As such, I think it is a reasonable assumption that Tesla may require further capital from the outside market to execute this ambitious phase of expansion while de-risking the story."
The TSLA Bull
On Jan. 13, Oppenheimer analyst Colin Rusch maintained an Outperform rating on Tesla's stock and raised his price target from $385 to $612.
Rusch expressed his belief in the company's technology differentiation and incremental growth potential. He also believes Tesla is an "existential threat" to other automakers.
"While TSLA has stumbled through growing pains, we believe the company has reached critical scale sufficient to support sustainable positive [free cash flow]," Rusch said. "Given the resolution of manufacturing bottlenecks and demonstration of strong consumer demand, we believe TSLA is becoming a must-own stock and could benefit from inclusion in additional indexes."
Tesla is scheduled to report first-quarter earnings after Wednesday's close. Analysts are looking for earnings of $1.62 per share on revenue of $6.047 billion.