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Tesla Attempts Comeback Despite Market Headwinds

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J.D DURKIN: This is not the same Tesla  (TSLA) - Get Free Report than it was a year ago. What are we to make of where Tesla sits as of November 23rd?

MARTIN BACCARDAX: You know, you're right, the headwinds now are so different and they're mostly related to what's happening in China and supply chains and demand and things like that. Also, I think the fact that we've had significant selling of Tesla shares from CEO Elon Musk in part to pay for his acquisition of Twitter  (TWTR) - Get Free Report and in part to satisfy a tax liability that has put extreme downward pressure on the share prices as well. And it has to be said, the distraction that Musk is now embroiled in, in trying to get Twitter profitable is only going to create further doubt about his ability to focus on Tesla's headwinds into the coming months and indeed, into 2023.

But what we saw this morning, actually last night and this morning was kind of a change of heart from two significant analysts, one who has been a longtime bear on the stock and one that has been a long time bull. Citigroup analysts boosted their price target on Tesla to $176 a share. That was about a $35 increase, and they lifted the rating from sell to neutral. That's a big change for a bank that has been downbeat on Tesla's prospects. Morgan Stanley, however, which has been a long time bull for the stock and has a $330 price target, has said that the downward movement has probably ended and that the $500 billion that the company has given back in terms of market value this year probably marks the bottom.

So we are seeing a bounce in that stock right now. And I think in both cases, the assumption is that the Inflation Recovery Act and the ongoing demand for electric vehicles in the near term and Tesla's consolidated position in that market are going to drive value for the stock. So that's one example, J.D. going back to our previous conversation about a company that will navigate changes in the global economy in the way that investors seem confident in. So that will be one example of a company that can do that because it is nimble and because it has leadership that understands those challenges and can make changes on the fly. It will be interesting to see whether the other beaten down names are able to do the same.

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