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Shares of Tesla (NASDAQ:TSLA) are up almost 2% in pre-open Wednesday after Citi analysts upgraded to Neutral from Sell.
The analysts believe the valuation is more justified now after the recent pullback in Tesla stock that has created a more balanced risk/reward in the near term. The analysts also raised the price target to $176 per share, from $141.33, to reflect a higher multiple.
Analysts highlighted the three key points:
“In a hard landing scenario Tesla’s LT competitive position likely also improves and potentially further enhanced by IRA,” they added in a client note.
The analysts also weighed in on the discussion of what would need to happen for Citi to get more bullish.
“We’d like to gain added confidence on the ASP/auto gross margin bridge (including tracking NT datapoints in China and Europe) and FSD progress. Under the current macro, we’d like to build more conviction, so for the time being we regard risk/reward as balanced here,” the analysts concluded.
Tesla stock price is down over 50% YTD.
