In Defiance of Recent Rhetoric, 1 Wall Street Analyst Says Tesla Stock Still Has 88% Upside

These are tough times for Tesla (TSLA 15.31%) shareholders. The stock is down 60% from its 2021 peak, and trading near 52-week lows thanks to a recent wave of lowered price targets. The electric vehicle (EV) maker faces stiff competition now and failed to deliver as many EVs as analysts expected in Q1.

One analyst, however, still believes in the EV manufacturer's long-term potential. While Morgan Stanley's Adam Jonas did lower his price target on Tesla stock from $320 to $310 this past week, his new target suggests shares will climb 88% higher over the next 12 months.

Fair arguments from both sides on Tesla

Although Tesla reclaimed the title of the world's biggest electric vehicle maker (as measured by total cars delivered) in Q1, it temporarily lost that title to BYD in the final quarter of 2023. And, even the first quarter's reclamation of this top spot is tainted. Tesla's total EV deliveries fell from 422,875 in Q1 2023 to 386,810 cars last quarter, missing the consensus expectation of 454,200 units. It all points to fading demand, manufacturing challenges, or both. That's why it's not surprising Tesla stock's turned into a proverbial punching bag of late.

Morgan Stanley's Jonas believes the selling has gotten out of hand though.

While he acknowledges weakening results for its automotive business are worrisome, Jonas argues the stock's present price ignores longer-term opportunities in areas like energy storage and robotics. He also believes that once the "ongoing EV shakeout" has run its course, Tesla will remain a premier name in the still-growing EV business.

What to do with the mixed messages over Tesla

The premise behind Jonas' bullish argument holds water -- the bearish rhetoric has taken on a life of its own, seemingly inspiring more of it.

On the other hand, a 12-month price target of $310 is aggressively hopeful at this time. The smart-money move to make with Tesla right now is just steering clear of any bullish or bearish bets on it, and instead wait for the clarity that surfaces when cooler heads prevail.