Tesla stock is down 20% this year. Here's when Wall Street expects a rebound

Published Sun, Jan 30 20226:44 PM EST

Yasmin Rufo

With the Nasdaq set to have its worst January on record amid broad tech sell-offs, Tesla stock is down significantly. But a number of Wall Street analysts are expecting a rebound in the not-too-distant future. Tesla's shares have fallen around 20% since the start of 2022. That's despite the EV maker reporting stronger than expected fourth-quarter results on Jan. 26, with revenues hitting $17.72 billion versus the $16.57 billion expected, and earnings coming in at $2.52 per share, beating forecasts of $2.36. Warnings about supply chain issues saw shares fall as much as 5% in extended trading on Wednesday, but they later rebounded into slightly positive territory. The strong earnings have helped bolster confidence in the stock on Wall Street, with CFRA Research's Garrett Nelson telling CNBC that a rebound for the stock is overdue. "Tesla has been weaker since the beginning of the year due to some profit taking after a stellar couple of years, but we upgraded our rating to 'buy' a few weeks ago as we still see room for the company to grow," Nelson said in a phone interview ahead of earnings. The research house's price target of $1,250 represents an upside of nearly 50% from Friday's close of $846.35. It "reflects a view that the completion of new factories in Texas and Germany sets the stage for further growth in 2022 and beyond," Nelson wrote in a note on Jan. 15. Wedbush Securities analyst Dan Ives also expects Tesla stock to rebound and sees an upside of 65% based on his recently reiterated 12-month price target of $1,400. Ives told CNBC in a phone interview ahead of earnings that he expects the coming weeks and months to be a "seminal moment" for the stock, as analysts digest the company's fourth-quarter results and guidance. "In the face of the biggest chip shortage ever seen, Tesla has been able to execute flawlessly whilst many competitors have fallen by the wayside. As the chip shortage starts to moderate for Tesla in the second quarter, we think [CEO Elon] Musk is likely to be cautiously optimistic and set the company up for further successes," Ives said. In a note following earnings, Ives added that the company's "delivery numbers combined with this 'impressive earnings beat' speaks to an EV demand trajectory that looks quite robust for Tesla with clear momentum heading into 2022." Credit Suisse analyst Dan Levy, who has a buy rating on the stock, says a rebound could take a little time, however. In a note to investors on Jan. 26 he said, "while the stock may see near-term pressure from a lumpy result, we believe investors are more likely to focus on the long-term growth and margin opportunity." Fairlead Strategies Founder Katie Stockton also sees difficulties for Tesla in the near term amid signs of "exhaustion" in the stock. "We could see more consolidation and range-bound volatile swings in the short term up to nine months," she told Worldwide Exchange on Thursday. Stockton said she's allowing current volatility to pass and is "overweight in defensive sectors including consumer staples, utilities and parts of healthcare" in the meantime. Of 31 analysts covering Tesla, 16 have a buy rating on the stock, according to Tipranks, with an average price target of $1,092.68, representing an upside of around 30% from Friday's close. -- CNBC's Lora Kolodny and Jordan Novet contributed to this report.

A Tesla mobile service vehicle outside a dealership in Vallejo, California, U.S., on Tuesday, Oct. 19, 2021.

David Paul Morris | Bloomberg | Getty Images