When predicting future stock prices, analysts are typically quite careful and conservative. Gordon Johnson of GLJ research disagrees and is quite pessimistic about Tesla (NASDAQ: TSLA). Johnson predicts a near-90 percent decline in the value of the electric vehicle (EV) market leader's stock.
A top contender for a short sale is Tesla, according to the analyst. Johnson recommended selling Tesla shares at a price of $23.53 per share at the end of March, which is significantly lower than the company's Monday closing price of around $175 per share.
Johnson has identified Tesla as his firm's top short recommendation due to the expected decrease in value.
According to Johnson's research note, rival automakers BYD and Toyota sold more vehicles in the past 12 months than Tesla did in the previous 12 months, despite the fact that Tesla's market worth of $558 billion is greater.
However, the analyst did lower his first-quarter vehicle delivery forecast for Tesla from 417,500 to 406,500, while keeping his recommendation and price target same. The average analyst prediction was 462,200, so that's a significant drop.
Exiting electric vehicles Despite being in line with current events, Johnson has a very pessimistic view of Tesla. Sales of electric vehicles as a whole have decelerated, and CEO Elon Musk is a common media darling due to his involvement in a number of scandals. Shares of Tesla have lost some of their luster after falling 60% from their peak, at least for the time being.
In order to regain the trust of its investors, the corporation must fulfill ambitious commitments, such as its next-generation vehicle platform.
Regardless of whether Tesla encounters additional setbacks and obstacles, Johnson's price objective will continue to be wildly unrealistic. Also, not all investors should try shorting stocks because of the high risk involved.
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