Tesla's Stock Shows Bullish Market Sentiment Despite Moderate Trade Volume

Company Snapshot

Tesla, Inc. (ticker: TSLA) closed at $271.3 on September 13, 2023, with a positive change of 1.43% or $3.82. The day saw a trade volume of 110.42 million shares. Despite this volume being moderate compared to its average volume of 125.55 million shares, the price level indicates a bullish market sentiment. The company boasts a Market Cap of $861.10 billion and has approximately 3.17 billion shares outstanding.

Technical Analysis

Drawing from Tesla's Relative Strength Index (RSI) of 67, the stock seems to lean more towards being overbought, thus an imminent sell-off cannot be ruled out. The Moving average convergence divergence (MACD), which is the 3-month value at 2.40, suggests that the stock is currently enjoying upward momentum.

Tesla's price has generally been above its 50-day moving average of $256.76 and far above its 200-day moving average of $200.94. This shows the stock's upward trend in the mid and long-term horizons. The stock hit a day's low of $268.1 and a high of $274.98, while the year's highest and lowest price points were $313.8 and $101.81, respectively.

The stock currently has a support level of $259.46 and a resistance level of $273.58. A break above the resistance could lead to a new rally, while a fall below the support might signify a downward trend.

Fundamental Analysis

Tesla, Inc. after the last close had a high price-to-earnings (PE) ratio of 70.28, reflecting the high expectations of investors for future earnings growth. Despite this, Tesla delivered an earnings per share (EPS) of $3.86 that supports the optimism in the company's growth.

Based on a discounted cash flow (DCF) analysis, the estimated stock value is $277.68, which is slightly higher than its current close, indicating an undervalued position. Additionally, financial experts have placed the consensus target price for Tesla' at $292.05, with the lowest target being $130 and the highest target climbing to $526.67.

Overall, the expert consensus favors a "Buy" stance on Tesla, with 22 recommending "Buy", 6 maintaining a "Hold" stance, and a minority suggesting to "Sell".

News Analysis

Regarding recent news, Tesla finds itself pinned in neutral while US auto sector giants such as General Motors and Ford have received "Buy" ratings. However, Tesla's multiple revenue sources, beyond just EV sales, have kept its fiscal strength credible. The company has also received suggestions to raise capital by selling stock, potentially capitalizing upon its competitive advantage in the EV market.

Morgan Stanley optimistically sights Tesla's Dojo supercomputer as a potential catalyst for market cap growth, even though there are noted contradictory views around the company's relationship with China. Separately, Tesla's CEO, Elon Musk, has recently signaled desires to advance AI development in government, speaking to the company's forward-thinking approach.

Projections and Recommendations

The price of the stock could likely experience modest gains during the next trading day, September 14, 2023, floating around the DCF value of $277.68. However, considering the RSI and the price levels with respect to the moving averages, a slight pullback could prevail later in the week. Still, the fundamentals and company news affirm the overall positive outlook for long-term prospects.

Conclusion

Given the in-depth analysis, in the short-term, Tesla might face minor corrections due to the overbought condition. However, fundamentally, Tesla remains a robust company and the long-term outlook remains bullish. We categorize Tesla as a 'Hold' in the short-term, seeking a better entry point while maintaining 'Buy' for the long term based on its potential growth perspective. This combines the technical and news factors hinting at a temporary pullback and the strong fundamentals and industry potential leading to long-term growth.