Tesla (TSLA) Stock Price and Forecast: Why the next target is $886

Tesla (TSLA) finally broke below $980 on Friday in a day of heavy losses for the electric vehicle leader. Growth stocks continue to suffer, and Friday saw perhaps an acceleration of that trend. Risk aversion is growing ahead of the first rate hike, while geopolitical tensions are also not helping risk appetites as the Russia-Ukraine situation continues.

Tesla had attempted to hold things together on Thursday when it put in a surprising up day despite the main indices falling. However, from Friday's price action it now appears that Thursday's gain was a mere aberration and normal service is now resumed. Tesla reports earnings on Wednesday, so there may be some hope of stopping the losses. It will take a strong set of earnings to do that however.

Tesla Stock News

There has been quite a bit of news over the weekend for Tesla but nothing that looks too positive. For starters, the stock remains one of the stop stocks trending on social media with WallStreetBets mentions high. Usually, that would be taken as a positive sign, but the power of the retail crowd has faded and many of their favorite meme names are significantly underwater this year.

Elon Musk was busy sharing pictures of the graffiti on the walls of the new Berlin factory over the weekend, which generated some talk that production may be imminent. Another new plant, Texas is due to come on stream shortly, and reports over the weekend indicate that Tesla is looking to begin Model Y deliveries from the Texas plant before this quarter is up. However, the negative momentum generated by Netflix (NFLX) earnings last week has spread across the growth sector with TSLA shares suffering as a result. 

Ahead of Wednesday's earnings release, average forecasts are for earnings per share (EPS) of $2.35 on revenues of $16.65 billion. The average analyst price target for Tesla currently sits at $1,057. Tesla has already released its delivery data with a total of 305,840 vehicles produced in Q4 2021 and 308,600 vehicles delivered in the fourth quarter. 

Tesla Stock Forecast

For now Tesla stock enters a confirmed bearish phase. Breaking $980 has created a new low and also confirmed the higher high from January 4. This spike is when Tesla released its delivery data, so this has already been baked into the price. This means an outperformance is even harder now on the earnings number. $886 is the next significant low, and if this bearish trend is to continue, then that low needs to be broken. Small resistance at $1,115 and then the January 4 high of $1,208. 

Tesla chart, daily

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