Tesla (TSLA), despite sluggish sales performance... Wall Street's 'sell' ratings are at a 3-year 'low'

▲ Tesla/Source: Twitter

Despite sluggish EV sales and stock price adjustments, the proportion of 'sell' investment opinions for Tesla (TSLA) from Wall Street brokerage firms has fallen to its lowest level in three years. This is interpreted as a result of the spread of cautious sentiment, indicating an unwillingness to prematurely challenge the innovative capabilities of CEO Elon Musk, even amidst short-term performance pressures.

Benzinga reported, citing Bloomberg data, that the proportion of 'sell' ratings among the 61 investment banks and brokerage firms covering Tesla has fallen to 13.1%. This is the lowest figure since April 2023, representing a nearly 50% drop compared to the 23.3% recorded in January of this year. This indicates a clear departure of analysts recommending 'sell,' even as Tesla's stock price has fallen approximately 19% year-to-date and its automotive business segment is struggling.

This reduction in 'sell' ratings stems from a prevailing sense of caution towards CEO Musk across Wall Street. Max Gokhman, Senior Vice President at Franklin Templeton Investment Solutions, stated in a Bloomberg interview, "There's a sentiment in the market not to bet against Musk." He explained that the market has learned that even if Musk experiences long delays in meeting target schedules, he ultimately realizes ambitious projects.

However, the decrease in 'sell' ratings does not directly translate into a rosy outlook for Tesla. Wall Street analysts are largely shifting from 'sell' reports to 'Hold' ratings, which are neutral. The proportion of 'Hold' ratings has reached its highest level in two years. This analysis suggests that analysts feel burdened by making clear 'buy' recommendations, as Musk's critical next-generation bets, such as autonomous robotaxis and humanoid robots, have not yet been proven with concrete results.

Even amidst pressure on EV delivery volumes, Tesla is forming downside protection based on Musk's symbolic influence and expectations for next-generation growth drivers. With Wall Street's 'sell' ratings at a three-year low, market attention is focused on whether Tesla can convert neutral analysts into buyers with the commercialization of autonomous driving and robotics.

[Article Key Summary]

-The proportion of 'sell' investment opinions for Tesla (TSLA) fell from 23.3% in January to 13.1%, marking its lowest level since April 2023.

-Franklin Templeton analyzed that Wall Street is hesitant to issue 'sell' recommendations, mindful of Elon Musk's ability to realize long-term projects.

-While robotaxi and robot verification are underway, the proportion of 'Hold' ratings has surged to a two-year high instead of 'sell' ratings.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*