Analyst Says New Board Members are Reason to Have Hope in Tesla (TSLA) Stock
Following a court settlement that made Musk’s seat as CEO contingent on the hiring of two new board members, Oracle’s Founder and Executive Chairman Larry Ellison is stepping into the role along with Kathleen Wilson-Thompson, the global head of HR at Walgreens Boots Alliance.
Wedbush’s analyst Daniel Ives says the picks are both very impressive people. Ellison, according to Ives, is highly regarded in tech circles and has a positive reputation in both the Silicon Valley and Wall Street.
“[…] the addition of Mr. Ellison on the board in our opinion is another key step forward for Tesla and Musk as the company starts to build an independent and well regarded Board that can help the company navigate through transformational opportunities in the EV market over the coming years with competition and production complexity a key factor that needs to be handled without a major speed bump,” Ives asserts.
Ellison is a founder of what has become one of the most successful technology stalwarts in the world, growing the company from the ground up. Ives suggests this move will be an asset for Tesla and Musk in particular, as his focus can help Musk channel his energy and passion into something constructive and steer him away from a tweetstorm (which Musk recently became known for).
“There are a number of pieces to the puzzle that Tesla needs in order to capitalize on what we view is a transformational EV market opportunity over the next decade, with one of these key areas being a strong and sound Board that can successfully guide Musk & Co. to capture this pent up Model 3 demand worldwide, while achieving sustainable profitability/cash flow in this balancing act,” Ives concluded.
All in all, Ives maintains his Outperform position on Tesla and offers a price target of $440, which shows an upside of just about 32%. (To watch Ives’s track record, click here)
Analysts don’t all share the same sentiment with Ives. TipRanks analytics finds the Street is torn up about this one – with Tesla being considered a Hold, with a consensus price target of $337.74, showing a slight upside potential. Out of 25 analysts, 10 are bullish, 7 are sidelined and 8 are bearish. (See TSLA’s price targets and analyst ratings on TipRanks)