Baird Still Bullish On Tesla Shares Despite Decline

Tesla (NASDAQ: TSLA) shares remain under fire despite the holiday season, with the stock tumbling again on Tuesday, adding to its significant recent losses.

Tesla shares closed the session down more than 11%, resulting in an over 61% decline in the last three months. Tesla shares have been pressured by several factors this year, such as the zero-Covid policy in China impacting production and investor worries regarding CEO Elon Musk's takeover and involvement at Twitter, which has impacted its more recent performance.

However, Baird analyst Ben Kallo remains positive on the company's outlook, despite lowering the firm's price target on the stock to $252 from $316.

Kallo maintained an Outperform rating on the shares, telling investors he reduced Tesla estimates “to be conservative” after recent comments on the electric vehicle giant's outlook by Chief Executive Elon Musk and the potential for weakening demand.

Recent reports have revealed a production slowdown at Tesla's Gigafactory in Shanghai during January 2023 and price cuts in North America, and while the analyst said this may point to weakening demand at the beginning of the year, Tesla “has many demand levers to pull including an increase in vehicle leasing and additional supercharging incentives.”

In addition, Kallo sees Tesla as best positioned in the auto market as electric vehicles continue to take a share of the total market. Furthermore, he believes the company's other opportunities, such as Tesla energy, will continue to grow in 2023. As a result, the analyst is a buyer of the stock, recommending it as a “Best Idea” in 2023.