Investment banking giant Goldman Sachs on Friday reaffirmed its bullish stance on Tesla stock (via Yahoo Finance). The institution maintained a “Buy” rating on Tesla shares but did reduce its price target for the stock down from $333 USD per share to $305.
Goldman’s new price target would represent a 48% uplift from Tesla’s share price of $204.99 at the time of writing. According to Goldman Sachs analysts, Tesla is poised to extend its “leadership position” in electric vehicles (EVs) as more of the automotive industry makes the shift to all electric.
“We believe that Tesla, given its leadership position in EVs (including its vertical integration and tight coupling of hardware and software, as well as its ecosystem of charging stations and brand), and its focus on clean transportation more broadly (given its solar and storage businesses) will be best positioned to capitalize on the long-term shift to EVs,” Goldman analysts wrote in a new paper centered on potential winners from the ongoing autonomous driving boom.
“We expect Tesla to expand margins in the medium term as it ramps the important Model Y product as well as new factories in Berlin, Germany, and Austin, Texas, and in the long-term as it increases its mix of software revenue,” the paper continued.
Tesla’s stock has suffered in recent weeks, largely as part of a wider market downturn. That said, company CEO Elon Musk’s protracted battle with Twitter over his proposed acquisition of the social media company may have something to do with it as well.
Investors are aggressively offloading stocks as the U.S. Federal Reserve continues to hike interest rates and companies across industries brace for a recession. Tesla’s share price has slid 48% year-to-date, dipping 32%% in the past month alone.
Even so, bull confidence in Tesla hasn’t dwindled by much. Long-time Tesla bull Cathie Wood from investment firm ARK Invest remains optimistic about the stock.
“Certainly all stocks are experiencing difficulty in this environment as the market tries to understand how far the Fed is going to go and how deep this recession is going to be. So Tesla is a solution to the problem,” Wood told Yahoo Finance Live.
Earlier this month, Wood and her investment firm bought more than 130,000 Tesla shares on the dip.
While the automotive industry as a whole is expecting sales to fall, Tesla reported a record 343,830 deliveries for the third quarter.
