Tesla Inc. (TSLA) Stock Faces Short-Term Bearishness, Analysts Remain Positive

Technical Analysis

Tesla Inc. (TSLA) stock last closed at $242.68 on October 18, 2023. The stock experienced a downturn of 4.78%, equivalent to a $12.17 decrease. Over the course of the trading day, the price fluctuated between a low of $242.08 and a high of $254.63. With 317.40 million shares outstanding and a relatively high average volume of 113.21 million shares, this stock has a high liquidity in the market.

In terms of technical analysis, Tesla's 50-day moving average is at $250.36, above its last closing price, and its 200-day moving average is $213.02, below the last closing price. This indicates some short-term bearishness while long-term trends still indicate bullishness. The RSI14 is at 47, indicating neither overbought nor oversold conditions. The stock's MACD over a three-month period is -3.13, suggesting a bearish trend.

The stock has had a range of $101.81 to $299.29 over the last year, and currently, it is trading closer to the low end of this range. The stock has identified support and resistance levels at $240.5 and $262.9 respectively. These levels will be crucial to monitor in the upcoming trading days.

Fundamental Analysis

Tesla Inc., trading on the NASDAQ exchange, has a large market capitalization of about $770.26 billion. The company has reported an EPS of 3.5, resulting in a high PE ratio of 69.34, which indicates that the stock is currently trading at a premium relative to its earnings.

Critical news reveals some uncertainty around Tesla's future prospects. From the recent earnings call, it is evident that the company is encountering difficulties efficiently scaling up its new factories. Additionally, Tesla’s CEO, Elon Musk, has indicated cautiousness about the Cybertruck's production ramp-up. Such news could potentially pressure the stock in the short term as investors reassess their expectations.

By using a discounted cash flow (DCF) model, Tesla is slightly overvalued with a price of $242.68, compared to the DCF value of $247.36.

Analyst Expectations

Despite the recent negative news and earnings disappointment, the consensus among analysts remains positive. Out of the total 34 analysts, 24 recommend buying the stock, seven suggest holding, and three advise selling. The median target price among analysts is $280, while the overall consensus target is somewhat higher at $294.63, indicating upside potential from its current price.

Prediction for Next Trading Day and Upcoming Week

Given the recent bearish performance and lower than average trading volume, the Tesla stock could potentially start the next trading day, October 19, 2023, on a lower note. However, considering the stock's volatility and the support level at $240.5, a significant drop seems less likely.

If negativity from the recent news continues to sour investor sentiment, the stock price might test the support level in the upcoming week. However, considering the strong medium-term support from the 200-day moving average at $213.02, a sharp downward trend seems unlikely.

Final Evaluation

Considering the bearish short-term technical signals, volatile news, and ongoing uncertainties in production, it may be suitable for traders looking for short-term opportunities. For long-term investors, while the company's futuristic vision and dominant market position within the EV space are attractive, the high PE ratio indicates the stock's relative expensiveness.

Therefore, given the current technical and fundamental indications, the final evaluation would be a "Hold". Despite the short-term bearish signs, investors could wait for further clarity on production concerns before taking decisive action.