Analysts React to Tesla's (TSLA) Battery Day Presentation

Emmanuella Nwokenkwo & Jeeho Yun

On Tuesday, September 22, 2020, Tesla held it’s Annual Meeting of Stockholders, followed by its highly anticipated Battery Day event. CNBC reported that during the battery day presentation, CEO Elon Musk said he anticipates deliveries rising 30%-40% in 2020, compared to last year’s 50% growth. Also, he predicted that the company will be able to make a compelling $25,000 electric car in 3 years, which sounds a bit optimistic.

In addition to Battery Day, Elon Musk has many innovations and plans laid out to improve the sustainability of the car. Tesla plans to develop a “tabless” battery cells that will improve an electric car’s range and power. The “tabless” battery is expected to reduce Tesla’s cost per kilowatt-hour, which allows the company to sell electric cars at a lower price.

While Tesla may embody the idea of a ‘bullish’ stock, many are currently exhibiting their ambivalence to the stock. With the ambitious goals that the California-based company laid out, coupled with the short 3-year completion span, many financial institutions have doubts as to the feasibility of their plans. Analysts at Canaccord lower Tesla’s price target $377 from $442, as it’s possible that they’ll “disappoint investors who view the company as a tech juggernaut.” In fact, analysts applied a “healthy” multiple and yet ended up with a lower price target.

However, institutional peer Deutsche Bank upgraded Tesla to Buy (from Hold) because of the technological advantages that the process will grant them. And despite the manufacturing challenges ahead, the analysts raised their target price as they believe Tesla displayed an “impressive trajectory” for the growth of the company. With the stock down on the day, Deutsche Bank analysts concluded that while “traders 'sell the news', [they] recommend longer-term investors take advantage of weakness to buy Tesla as the best way to invest in vehicle electrification.”

Disclosure: At the time of publication, we are long Tesla. We wrote this article ourselves, and it expresses our own opinions. We are not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article. 

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Comments (1)
No. 1-1

I agree, a bunch of investors could be disappointed. I just can't commit and say that Tesla is a long term investment, not at this moment. However, do grab shares while they're down! Just monitor the stock closely.