It’s no secret that Tesla (NASDAQ:TSLA) stock is one of the most talked-about plays on Wall Street.
There are convincing reasons to invest in Tesla now, but the best policy is to wait until Oct. 18 if you’re thinking about buying TSLA stock.
I’ll explain why that date is so important. First, however, prospective investors should consider Tesla’s headwinds and advantages. I’m not only referring to Tesla’s recent legal issues. There are bigger-picture concerns that must be addressed, so let’s delve into that topic now.
TSLA Stock Gets a Price-Target Cut
There’s been a lot of chatter about Tesla’s third-quarter delivery data. Yet, Deutsche Bank analyst Emmanuel Rosner is looking beyond the short-term results and mulling Tesla’s ability to grow in the future.
Rosner recently lowered his price target on TSLA stock from $300 to $285. More important than Tesla’s third-quarter production and delivery figures, Rosner claims, is “meaningful downside risk to 2024 consensus because of limited volume growth next year.”
How “meaningful” is the “downside risk”? Rosner’s base case calls for Tesla to “guide to about 2.1 million deliveries next year, versus current consensus of 2.3 million units.” The analyst is concerned because Tesla is “no longer planning to expand output at” its “Austin and Berlin factories to 10,000 per week.”
Tesla isn’t likely to grow at its previous, blistering pace. This could lead to disappointing future results for Tesla shareholders.
Tesla Is Still the EV Heavyweight Champion
So, now you have an analyst’s bearish thesis for Tesla. In contrast, Battle Road Research analyst Ben Rose recently upgraded TSLA stock and seems to have a decidedly bullish outlook.
Rose opined that Tesla is the “market-leading EV manufacturer by far.” That’s a fair point, as Tesla dwarfs other companies that only make EVs in terms of brand-name recognition and market capitalization.
Rose asserted, there are “no signs” of Tesla “ceding meaningful market share.” The analyst supported this claim by pointing out that Tesla’s “market share of U.S. EV sales in the first half of 2023 is still north of 60%.”
No competitor is “even close,” Rose added. I tend to concur with this assessment. Hence, unless another EV manufacturer seriously threatens to steal Tesla’s market share, TSLA stock seems to have a favorable risk-to-reward balance.
Wait Until Oct. 18 Before Buying TSLA Stock
Currently, I’m leaning more toward the bull side than the bear side with Tesla. Sure, it will be challenging for Tesla to continue growing at a fast pace, but that’s because the company is already an EV market dominator.
Bear in mind, though, that Tesla is getting ready to report its third-quarter 2023 earnings results on or around Oct. 18. That’s why I feel it’s too risky to take a share position right now.
The prudent thing to do is wait until the earnings results have been released before considering a position in TSLA stock. That way, you’ll have more information on which to base your decision to buy, sell or just stay away.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
