Tesla CEO Elon Musk has reassured investors that his focus continues to remain on the electric vehicle (EV) manufacturer going forward at the company’s annual shareholder meeting held in Austin on Tuesday.
“With the Twitter soap opera finally in the background with the impressive announcement of Linda Yaccarino stepping in as CEO and Musk moving to a product development role at Twitter, Elon reiterated to investors that he will remain CEO of Tesla to lead this period of innovation and Twitter will comprise less of his time which is music to the ears of Tesla shareholders,” Wedbush analysts observed.
They wrote in a note to clients: “We believe Musk will remain CEO of Tesla for at least another five years as Tesla navigates this next phase of its EV growth which we still view in the early innings.”
Musk updated investors on the company’s current product fleet and Part 3 of its Master Plan, in addition to stating that Cybertruck was on target for production later this year.
The analysts noted that Musk’s assertion that the company would try out “a little bit of advertising” to teach more about the full Tesla story was a positive development.
“We view this as a major positive for Tesla as many parts of the Tesla product portfolio are undervalued by the Street with Full Self Driving (FSD) a major potential value adder on top of the company’s expanding product portfolio across auto and energy as many in the general public does not know about the affordability and capabilities of TSLA products,’ they wrote.
“We believe no advertising was the right strategy for Musk & Co. in the past but is no longer the best path forward as competition increases across the EV landscape.
“We were very pleased to see the change in stance around advertising with Musk and overall we saw a ‘rejuvenated Musk’ at the shareholder meeting which was noteworthy compared to a year ago.”
Following the meeting, Wedbush’s analysts maintained their ‘Outperform’ rating and $215 price target on Tesla.
“Our $215 price target represents 20x the long-term earnings per share (EPS) earnings power. Our 2026 free cash flow (FCF) estimate is $10 billion,” they wrote.
Tesla shares were trading up 4.1% at US$173.30 in the early afternoon on Wednesday.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie