Tesla Stock Extends Losing Streak Ahead of Election Day
Tesla stock is headed toward its sixth straight loss Monday and Wall Street is staying on the sidelines. Here's why.
Tesla (TSLA) stock rallied hard on the price charts following the electric vehicle (EV) maker's blowout earnings last month, rising more than 25% from October 23 to October 25. However, shares have been in a downtrend ever since – currently headed toward a six-day losing streak – which could be due to CEO Elon Musk actively participating in the Republican presidential campaign.
Musk has been campaigning for former President Donald Trump and formed the America PAC to support values that the two agree on, including secure borders, sensible spending and free speech. Trump has stated that if he is re-elected, he will create a government efficiency commission dedicated to sensible spending and it will be led by Musk.
However, while Musk and Trump align on many major issues, there are question marks surrounding how a Trump presidency would impact Tesla.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates and tax incentives get pulled," says Wedbush Daniel Ives. But for Tesla, Ives sees a Trump win as a potential positive with some caveats.
"Tesla has the scale and scope that is unmatched in the EV industry, and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled with likely higher China tariffs that would continue to push away cheaper Chinese EV players from flooding the U.S. market over the coming years," Ives notes.
In the case of a Harris win, Ives expects the EV tax credits will remain in place "and ultimately increased in 2025 as the goal to get more U.S. consumers towards EVs would be a laser focus in a Harris administration."
Wedbush has an Outperform (Buy) rating and $300 price target on TSLA stock.
Is Tesla stock a buy, sell or hold?
Tesla's latest losing streak has the shares trading in negative territory for the year to date and Wall Street is staying on the sidelines when it comes to the Magnificent 7 stock.
According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $222.68, representing a discount of more than 9% to current levels. Meanwhile, the consensus recommendation is a Hold.
Financial services firm CFRA Research has a Hold rating on Tesla, but raised its price target to $265 from $225 following its third-quarter earnings results.
"We raise our target in the aftermath of the company's Q3 earnings release and conference call, recognizing the willingness of investors to pay higher multiples for TSLA shares due to increased excitement related to the company's longer-term growth prospects," said CFRA Research analyst Garrett Nelson in an October 28 note.
The consumer discretionary stock's valuation has always been a pain point for analysts, Nelson says, with "bears arguing that the stock has been unjustifiably overvalued relative to auto industry peers for many years. We have long argued that TSLA should instead be valued as a 21st century, sustainable transportation, energy, and technology company and therefore valuation is more arbitrary."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Nvidia Stock Is Joining the Dow. Is It Time to Buy?
Nvidia will replace Intel in the Dow Jones Industrial Average this Friday. What does it mean for the stock?
By Dan Burrows Published
-
Why Constellation Energy Stock Is Sliding After an Earnings Beat
Constellation Energy stock is lower Monday as a regulatory decision offsets the utility company's solid third-quarter earnings results.
By Joey Solitro Published
-
Nvidia Stock Is Joining the Dow. Is It Time to Buy?
Nvidia will replace Intel in the Dow Jones Industrial Average this Friday. What does it mean for the stock?
By Dan Burrows Published
-
Why Constellation Energy Stock Is Sliding After an Earnings Beat
Constellation Energy stock is lower Monday as a regulatory decision offsets the utility company's solid third-quarter earnings results.
By Joey Solitro Published
-
Viking Therapeutics Stock Swings Wildly After Weight-Loss Drug Data
Viking Therapeutics stock is volatile Monday after the pharma company released positive data for its weight-loss drug. Here's what you need to know.
By Joey Solitro Published
-
How to Sell Your Business With No Regrets
The key to a successful exit: You've got to be prepared. So, start now by maximizing profitability, planning for succession and avoiding the dreaded five D's.
By Nick Guida, Investment Adviser Representative Published
-
The Bare Necessities of Buying Pet Insurance
Pet insurance can help put you at ease over the health of your furry friends. Here's what to look for when shopping around for a policy.
By Joelle Spear, CFP® Published
-
Should You Buy These Covered-Call Funds?
Covered-call ETFs are popular but come with plenty of caveats.
By Andrew Tanzer Published
-
Is It Too Late to Do a Roth Conversion if You're Retired?
The short answer is: Not at all. Roth conversions can be great tax-saving strategies … for the right people. Are you a good candidate?
By Arrin Wray Published
-
Five Options for Retirees Who No Longer Need Life Insurance
If you're retired and you've checked with your financial planner that life insurance is no longer vital, here are five ways you can turn it to your advantage.
By Evan T. Beach, CFP®, AWMA® Published