Tesla, Inc. (NASDAQ:TSLA) stock has seen some upward momentum since mid-May and the buoyancy has lifted it above the $200 threshold. An analyst, however, warned that this could be a false start and the stock's fate is doomed.
Struggling Car Maker? Tesla is the "Blackberry of the EV industry" and its valuation could implode as competition intensifies and it becomes clear to investors that it is a struggling car company, said GLJ Research analyst Gordon Johnson, repeating his thesis on the stock.
Blackberry, though was the pioneer of smartphones, went out of business as it failed to adapt to changing consumer preferences and competitors flooded the industry.
Johnson has a Sell rating on the stock and a $24.33 price target.
To support his argument, Johnson noted a Reuters report that said Tesla has doubled discounts on some Model 3 as well as on some Model Y and other cars held in inventory in the U.S. The promotional measure could have been precipitated by waning demand amid economic uncertainties, rising competition and the upcoming Model 3 refresh, he said.
See Also: Everything You Need To Know About Tesla Stock
Stock Ignores Bad News: The recent stock surge has come despite a spate of bad news in the past, including a lackluster Investor Day, inventory issues in the U.S./EU, moderating sales in China, concerning lead times and new price cuts, Johnson noted.
Tesla's stock strength, according to the analyst, is due to the $233.024 billion in liquidity the Treasury injected into the equity markets in May alone. The liquidity injection in the 30 days is equal to 25 years of Fed's balance sheet expansion, achieved through the working down of the Treasury General Account balance, and to a lesser extent AI euphoria, he added.
Johnson expects Treasury Secretary Janet Yellen to withdraw $600 billion to $900 billion from equity markets, now that the budget bill is on the cusp of being enacted.
"We believe TSLA's fundamentals may, shortly, come back into focus. And, as they do, with numerous problems mounting for the company, we expect the stock to resume its downward trend lower toward our PT by year-end," he said.
Tesla ended Wednesday's session up 1.38% to $203.93, according to Benzinga Pro data.
Check out more of Benzinga's Future Of Mobility coverage by following this link.
Read Next: Tesla's 'Golden Goose' Quest: Analyst Assesses Potential To Achieve 30-50% Battery Cost Cuts
Comment(6)
要黑特斯拉，拜托专业一点，别说没有提出任何可信的推理和数据之外，还把最基本的信息写错了：根据Benzinga Pro的数据，特斯拉周三收盘下跌1.38％，至203.93美元。
拜托，是上涨了1.38%
GLJ Research analyst Gordon Johnson is a 0.47 star analyst LOL. #7,623 out of 8,379 Wall Street Analysts.
Moomoo ah moomoo… please vet the articles so it doesn’t waste the app’s real estate space for quality articles
Hi mooer, sorry for the inconvenience. The problem has been forwarded to the team, and we will keep you updated. @Detachment-Delta please have a look here.
用户您好，抱歉给您带来不好的资讯体验，经核实该文章关于涨跌描述存在错误，文章已做修改处理，感谢您的反馈，我们将持续提升资讯服务质量
Dear mooer, your suggestion is well received and thank you for your advice. Sorry for the inconvenience, we will keep vetting about the quality of articles and improving your reading experience, hope you have a pleasant investing experience.
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