Elon Musk's Tesla (TSLA) -) has done a good job of creating a varied mix of uberbulls and ultrabears.
The difference in opinion largely comes down to current realities versus estimated upside, with the bulls confident that the Austin company's potential is enormous at every level and the bears sure of their stance that Tesla isn't too much more than a car company.
HSBC initiated coverage of Tesla last week, with analyst Michael Tyndall granting the stock a reduce rating and a price target of $146.
Tyndall, citing greater-than-anticipated expenses around Tesla's noncar-related projects, said Musk himself represents a unique "single-man" risk to the company.
Related: Wall Street bulls defend Tesla investing after stock slides
Bernstein analyst Toni Sacconaghi likewise says the stock has more room to fall rather than grow. With a price target of $150, well below current levels, Sacconaghi explained that Tesla's stock is an "extremely" difficult one to call, as so much of the stock movement has little to do with actionable numbers coming out of the company.
Consensus earnings estimates for this year, he told CNBC, have halved to $3, and yet the "stock is almost double from the beginning of the year."
"I think that's very challenging for investors when numbers generally come down and the stock is actually gaining ground," he said.
Sacconaghi said the key factor behind this inverse relationship between earnings estimates/reports and stock movements is investors continuing to believe in Musk's long-term Tesla vision. Within that vision, automobile autonomy is solved — cars drive themselves with true safety — and regulators approve, creating an enormous new business whose market Tesla will dominate.
A point of difficulty: Tesla's growth targets
But a major difficulty Sacconaghi sees at Tesla, even with the prospect that Tesla will continue to dominate the EV space, is its long-term growth targets.
Musk in 2021 told investors that Tesla would grow production by a compound annual growth rate that averaged 50%, a promise that Tesla has thus far hit.
Production grew 82% to 930,000 in 2021 from 510,000 in 2020, then more than doubled to 1.37 million in 2022. If Tesla meets its 2023 goal of 1.8 million, that's 31% growth.
Sacconaghi says Tesla may well have to start cutting these targets into 2024 and 2025, which could hinder the longer-term growth of the stock price.
"Tesla could have pretty modest unit growth because they're not going to have new models and they're struggling to grow now without doing major price cuts," he said.
Related: Tesla bulls say electric vehicle demand is soaring. Here's what's really happening
Tesla bears and the bulls agree on one point
While the bears and the bulls remain intensely divided when it comes to Tesla and its long-term potential, Sacconaghi's point of potential growth reductions is one that at least one of the bulls agrees with.
Gary Black, managing partner of Future Fund, wrote in a post Tuesday that the bulls should "reduce their expectations" that Tesla will be able to maintain that 50% annual growth rate.
Black has a price target of $300 for the stock.
Black's growth targets are 37% for both 2023 and 2024, while Wall Street targets have landed at 37% growth for 2023 but 22% growth for 2024.
Martin Viecha, head of Tesla's investor relations, said the company is "between two major growth waves: the first driven by 3/Y platform since 2017 and the next one that will be driven by the next-gen vehicle."
During Deutsche Bank's recent AutoTech conference, Viecha reportedly said that Tesla is currently in an intermediate low-growth period.
"I’m just saying that measured going forward — not backward — 50% volume [compunded growth rate) is probably an unrealistic goal," Black said. "Let’s keep expectations in check."
Shares of Tesla, which had been falling since the company reported weaker-than-expected earnings last month, have recently been rising. They finished the Nov. 14 session up more than 6% and at last check were up 2.8% near $244. In 2023 through Tuesday's close the stock is up 93%.
Related: Why Tesla stock is crumbling — and where it could go next
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