As Tesla Inc. TSLA stocks continued to slide towards the bearish case of Morgan Stanley, analyst adam jonas began to wonder if Tesla was leaning into value territory.
A member of CNBC’s “Halftime Report” panel suggested that Jonas must have been taking LSD or another psychoactive drug that produced altered states of consciousness when he started thinking about the Elon Muskcompany run as a value game.
What there is to know: Jonas reiterated his overweight rating and $330 price target on Tesla stock on Wednesday morning (November 23).
“Tesla is approaching our $150 bear case due to price declines in China, slowing demand for EVs and other market currents,” Jonas wrote in a new note to clients.
“An emerging value opportunity? »
Related Link: Tesla Sees $500 Billion Erosion From Valuation In 2 Months Is A Buy Opportunity: Analyst Sees 100% Upside
Why is this important: Gilman Hill Asset Management Jenny Harington was taken up by the use of the word “value” by Jonas.
“I think you pretty much have to be on hallucinogenic drugs to make a viable argument that Tesla is a discount right now or is a value stock,” Harrington said on CNBC’s “Halftime Report.”
She immediately pointed to the valuations of Tesla’s competitors Ford Motor Company F and General Motors Company GM. Ford is currently trading with a forward price-to-earnings ratio of around 6.1, according to Benzinga Pro. GM is even cheaper, trading around 5.5 times based on forward earnings.
On the other hand, Tesla’s forward-looking price-earnings ratio currently sits above 21.
“Even if you look at Tesla’s earnings next year…there’s no version of that that has value,” Harrington said with a laugh, noting that Tesla was expected to earn about $6 a share for the year. next.
“If you want to be super speculative and say $6 is going to go to $60, go dream…but you can’t call that a value stock.”
TSLA Price Action: Tesla stock rose 7.82% to $183.20 as of Wednesday’s market close, according to Benzinga Pro. Tesla has a 52-week high of $402.67 and a 52-week low of $166.19.
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Originally published Nov 23, 2022
Photo: Courtesy of Tesla.