Citron Research founder discusses Tesla’s value as an automotive company.
Tesla and CEO Elon Musk are hoping to prove the skeptics wrong when the electric-car maker delivers its fourth-quarter results after Wednesday’s closing bell.
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Shares of the Palo Alto, Calif.-based automaker have surged more than 35 percent this year, and are up 126 percent since the company reported a surprise third-quarter profit on Oct. 23, causing many analysts to voice concerns they have gone too far, too fast.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 580.99 | +14.09 | +2.49% |
“We think shares are over-shooting right now,” UBS analyst Patrick Hummel said in a recent note to clients in which he resumed coverage with a “sell” rating and $410 price target. He believes shares are pricing in 1.6 million vehicles sold in 2025 versus the 367,500 in 2019.
Hummel isn’t the only Tesla skeptic on Wall Street. Of the 35 analysts surveyed by Refinitiv, 15 suggest “sell” while only 10 say “buy.”
Investors are also dubious that the stock’s meteoric rise is built to last. At Tuesday’s closing bell, Tesla short interest was $14.04 billion, the largest among U.S. stocks, according to data compiled by the financial-analytics firm S3 Partners.
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Short-sellers, or traders betting against the stock, have already been saddled with $3.94 billion in mark-to-market losses this year, S3 said, adding that those same skeptics saw $2.89 billion in mark-to-market losses in 2019.
The losses were sparked by the automaker reporting an unexpected profit in the three months through September after losing money in the first two quarters of the year. Tesla lost $2 billion in 2018.
As for Wednesday’s results, Wall Street analysts surveyed by Refinitiv expect Tesla to report a fourth-quarter profit of $305 million. They see adjusted earnings of $1.72 a share on revenue of $7.02 billion.
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“Results and outlook must be strong to support the recent rally… and we expect them to be,” Morgan Stanley analyst Adam Jonas wrote in a note sent to clients on Tuesday. However, he maintained his “underweight” rating and $360 price target.
