Published on October 21st, 2020 |
by Chanan Bos
October 21st, 2020 by Chanan Bos
This is the third edition of our Tesla analyst report cards based on where their TSLA price targets and sell/hold/buy advice would lead you (based on information from tools like tipranks, marketbeat and other research).
It is actually a bit surprising, but the right words by these analysts can sometimes make the stock move quite significantly when in reality a lot of these analysts don’t appear to understand Tesla at all. Luckily, now that Tesla mostly answers questions from retail and institutional investors via say.com on its earnings calls, these analysts’ influence is diminished and people listening to (or watching) the Tesla earnings calls are saved from some of the most “boneheaded questions.”
This quarter, the report includes 26 analysts that have either updated their TSLA price target since the start of Q3 or are likely to appear on the call despite the fact that they haven’t updated their price target or don’t set price targets at all. The analyst cards are sorted from most bearish to most bullish, and this quarter there is at least one big surprise, Toni Sacconaghi from Bernstein.
Daniel Galves is a strange case. He is usually fairly bullish about Tesla, but he hasn’t updated his price target (to our knowledge) since Q2 2019, and thus appears to be bearish. Surely, his expectations for the stock price have shifted, but we don’t have any insight into that. He is on this list because he keeps appearing on the earnings calls despite not publishing price target updates.
Toni Sacconaghi is the biggest shock and surprise of the Tesla analyst world this quarter. Historically, this analyst has been known to be quite bullish on Tesla, and by ratings on tipranks, he is actually very well liked and followed. What appeared to be a fluke in the beginning of Q3 when he might simply not have had time to update the price target in response to the stock market has now turned unto a distinct pattern that also reflects the commentary.
In 2020 we would have thought that Tesla bears were a dying breed, mostly converting into bulls. So, to see his recent comments (see graphic above) is a bit puzzling. To call Battery Day “vaporware-ish” shows, in my opinion, a pretty big misunderstanding of what is going on with Tesla. The simplest explanation is that Toni all this time has had his own napkin math with a predetermined valuation that Tesla didn’t exceed in previous years but now does. In September, he was interviewed on CNBC, and even the news outlet that used to publish tons of FUD back in 2018 was more positive about Tesla than Toni was.
Dan Levy is certainly one of the more unusual bear-turns-bull analysts. Technically speaking, he isn’t a bull, and sentimentally speaking, I’m not quite ready to call him a bull either. In the past, his commentary on the company was extremely negative, to the point where it was practically FUD. It appeared that he did not understand the market, the company, or the technology, and I did not find his questions on the earnings calls useful. However, at some point in 2020, his commentary became a lot more positive and the questions he was asking on the call were no longer as absurd either. He has definitely pulled himself up by his bootstraps — just a few quarters ago he was literally the only TSLA analyst to have a negative general success rate and the absolute worst TSLA return. Now, that success rate is positive and his negative TSLA return is still in the triple digits but no longer as outrageously so.
For those who have forgotten, Goldman Sachs used to be very big TSLA bears, especially with its commentary. That is until the firm replaced the previous analyst with Mark Delaney. This analyst started off as a bull, seemed to have become a bear, and is now back to being a bull.
In any case, being on the job for just a few quarters is not enough time to judge his prospects as a TSLA analyst. One thing is for sure, though — his success rate and TSLA return scores are way better than that of his predecessor.
Deutsche Bank is a strange case. The name pops up more than once on the Tesla 10K SEC filing as a lender. This analyst, who has appeared on the earnings calls numerous times, is usually positive, but not excessively so. Even though the price targets have not been excessively bullish or bearish over the years, the firm’s success rate and slightly negative TSLA return makes it a strange case.
Last quarter, Alexander Potter had the highest TSLA price target. This time, he is in second place.
Pierre Ferragu this quarter has outbid even Alexander Potter and has the absolute highest TSLA price target. For a long time, he was mocked for having a TSLA price target twice as high as the stock price, but he was eventually proven right — very right.
You may have guessed or may simply recall that Gene Munster has a tendency to appear on these calls, and is usually quite bullish about the company. But we don’t have data for him.
Finally, my reasons for including Maynard Um from Macquarie Research actually have nothing to do with his price target. Rather, it has to do with the TSLA return. Even though this analyst probably stopped coverage of TESLA in Q3 2019, the fact that he recommended people buy when TSLA was at a lower price and just hold after that ended up giving him the best result. If there is a single conclusion to draw from it all, perhaps it is to just buy low and hold since no one can predict TSLA, especially not the analysts and their blunt financial instruments. Though, that is not actual investment advice, and we don’t provide investment advice of any sort. We’re not stock market analysts.
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