Tesla (TSLA) CEO Elon Musk has it within in his power to get the EV maker’s stock working higher again in 2023.
And stepping aside as Twitter’s leader isn’t the only course of action to be considered to whet the appetite of Tesla bulls. Or so says Dan Ives at Wedbush.
The omnipresent Wall Street analyst released a list of 10 things he would like to see from Musk in 2023 to turn around sentiment on Tesla.
Ives’ first suggestion comes as little surprise — Musk should name a new Twitter CEO by the end of next month.
But three of Ives’ other ideas for the company in 2023 caught our attention as potential positives for Tesla shares, even if Musk stays on as Twitter’s CEO.
From Ives’ latest client note:
Board of Directors changes with some more experience around tech and EV leadership. We believe new additions to the Board would be welcomed by the Street at this tenuous time.
Buybacks, Buybacks, Buybacks. Announcing a major stock buyback program is important/key for the Street’s confidence and with the stock at these levels a no brainer strategic move in our opinion for Tesla given its massive treasure chest.
More financial metrics and transparency around the margin structure at Tesla. We believe this is a hidden gem at the company with more production/sales in China and Giga Berlin and Austin ramping. Long term margin targets will be key for the Street.
To be sure, the Tesla trade has gone badly for the bulls this year, and executing any of the aforementioned action items may be low hanging fruit for a broken investment thesis.
The stock has plunged around 66% year to date — and over 35% in the past month alone — amid demand concerns and CEO Elon Musk’s unpredictable leadership at Twitter.
Ives, for his part, maintains an Outperform rating on the stock and a $175 price target; shares of Tesla closed at $112 on Thursday. As of early November, however, Ives had maintained a $250 price target on the stock.
The past two weeks have brought news Tesla will offer $7,500 discounts on Model 3 and Model Y vehicles delivered in the U.S. in December — an unexpected development that further pressured the stock price. Meanwhile, reports have surfaced Tesla is running lean production at its key Shanghai plant.
Investors haven’t taken that news positively, either. A number of analysts have downgraded the stock in recent days on fears of a sharp 2023 demand slowdown.
In a note to Tesla employees earlier this week, Musk implored his team to avoid being “too bothered by stock market craziness.” Musk added that in his view, Tesla will be the most valuable company in the world over the long term.
For Tesla bulls right now, however, the story simply needs to stop being about how much time Elon Musk is spending at Twitter.
“Focus attention back on Tesla, not Twitter (goes hand in hand with new Twitter CEO being named),” Ives wrote.
“Musk is the [heart and lungs] of Tesla and vice versa.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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