Tesla, Inc.’s TSLA stock began trading on a split-adjusted basis last week.
How Did Split Treat Tesla? Unlike the past split implemented two years ago, the stock did not experience any strength in the first session following the split. This is despite the stock coming into the 2022 split with marked weakness.
After closing at $891.29 on Wednesday, the day ahead of the stock beginning to trade on a split-adjusted basis, it opened at $302.36 on Thursday. Since Tesla split its shares in the ratio of 3:1, shareholders would be holding 3 shares for every share they held before the split.
Tesla slipped back by a modest 0.35% on Thursday to close at $296.07 and lost a steeper 2.70% to $288.09 on Friday, according to Benzinga Pro data. Friday’s weakness had to do with an across-the-board market sell-off, as investors indiscriminately sold stocks amid a very hawkish speech by Fed Chair Jerome Powell at the Jackson Hole Economic Symposium.
More importantly, after-hours trading in Tesla’s shares on Friday pointed to further weakness. The negative sentiment, however, could change between then and Monday, when it opens for trading.
Sell-Side Sentiment Mixed: Not all Wall Street analysts are in the bullish camp as far as Tesla is concerned. Incidentally, CNBC hosted a bull versus bear debate on Tesla late Thursday, which saw Tesla bull Dan Ives from Wedbush Securities squaring off with Tesla bear Gordon Johnson from GLJ Securities. While one continued to maintain Tesla could take off once the company sorts out its production issues, another reiterated that the period of hypergrowth could be in the rearview of Tesla, as competition closes in.
Here's a compilation of updated price targets:
- One of the first movers was Ives, who on the eve of the split taking effect announced a post-split price target of $360. The analyst clarified that the updated price target gives effect for the split and the production ramp-up in Giga Shanghai. The analyst has an Outperform rating on Tesla shares.
- Gary Black, another Tesla bull and founder of Future Fund, has a $500 price target.
- Jefferies analyst Philippe Houchois has a Buy rating and a $350 price target. The analyst said his Giga Berlin visit and investor meetings have left him with increased optimism.
- Berenberg analyst Adrian Yanoshik has a Hold rating and a $290 price target.
- Morgan Stanley analyst Adam Jonas has a split-adjusted price target of $383 and an Overweight rating.
- Meanwhile, Johnson’s split-adjusted price target is a paltry $22 and his Sell rating should not come as a surprise, given his pessimism concerning the EV maker and CEO Elon Musk.
Photo: Courtesy of Mario Duran-Ortiz on flickr
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