Shares of Tesla (NASDAQ:TSLA) have been on fire this year. Despite a recent pullback, TSLA stock is up more than 70% so far in 2023. From the recent low, shares are up more than 80% as well.
Of course, such a big rally does create a bit of concern about future gains over the next 12 months. But some would argue that shares can go even higher.
After six straight weekly gains at one point this year, TSLA stock has struggled over the last few weeks. Shares fell 5.5% two weeks ago and eked out a gain of just 0.46% last week. Although the stock held up nicely during the market dip, last week’s gain also underperformed the broader market. The S&P 500 climbed about 2% over the same period.
In any regard, shares of Tesla are down slightly on Monday as price adjustments make headlines — again. No other automaker seems to command this much interest around price changes for its vehicles. Whenever Tesla changes its prices, however, it’s front-page news.
So, what’s the latest? The electric vehicle (EV) maker will reportedly reduce its U.S. prices for the Model S and Model X by between 4% and 9%. Tesla has been cutting prices lately in an effort to help boost demand.
At the company’s recent Investor Day event, CEO Elon Musk said, “The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla.”
Some Analysts See TSLA Stock Climbing to $230
At one point, TSLA stock went through a brutal stretch. Shares fell in five straight months, shedding two-thirds of their value from the August high to the January low.
Is the worst over now?
After Tesla’s recent rally and subsequent consolidation, many bulls are praying that is the case. However, some actually expect even more upside.
On Monday, Jefferies analysts reiterated their “buy” rating on TSLA stock and raised their price target from $180 per share to $230. That implies about 18% upside from current levels. If achieved, this would give the stock a year-to-date (YTD) gain of about 87%. It would also equate to a more than 120% rally from the 2023 low.
According to Jefferies analysts:
“Lack of new product unveil does not imply major growth delays in our view. Scaling up 3/Y further through dynamic pricing could limit the scope for earnings surprises in 2023/24 but benefit FCF and ROIC.”
Given the recent trend in TSLA stock, it’s not a stretch to think that $230 could be in the cards this year. However, Tesla will likely need the overall market to cooperate as well. If the S&P 500 rolls over and falls hard, it may be difficult for the stock to hold up in that kind of environment. The same can be said if we slip into a recession, as recessions do not typically bode well for automakers.
On the date of publication, Bret Kenwell held a long position in TSLA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
