What does the future hold for Tesla (NASDAQ:TSLA) and Twitter (NYSE:TWTR)? Sell-side analysts from Bernstein and Morgan Stanley weigh in on the two tech giants, providing commentary on growth outlets and estimates. Let’s illuminate:
Reasons to Avoid Tesla Stock
Red flags were thrown up today by Bernstein analyst Toni Sacconaghi regarding the prospects of electric car giant Tesla.
Sacconaghi believes production delays and the specter of capital raise are really going to dominate investor
attention (for the next two quarters). Beyond that, the analyst thinks gross margins and build quality are the two issues that are going to drive people out of that range of $300 to $360.”
Taking a glance at where the stock might be directed, Sacconaghi noted, “I would probably take the down side in the near term. I think there will be worries about fundamental profitability and/or worries about quality at some point over the next six to nine months.”
As such, Sacconaghi reiterates a Market Perform rating on Tesla shares, with a $265 price target, which implies an 8% downside to Tuesday’s closing price.
Overall, Wall Street believes Sacconaghi is smart to play it safe when it comes to Tesla’s prospects ahead, as TipRanks analytics reveal TSLA as a Hold. Out of 21 analysts polled in the last 3 months, 5 are bullish, 9 are on the sidelines, and 7 are bearish on the stock.
Twitter – There Is Hope
Can you feel the ground moving beneath your feet? Shares of Twitter skyrocketed nearly 11% today, after Morgan Stanley analyst Brian Nowak upgraded the stock from Underweight to Equal Weight, while slightly raising the price target to $29 (from $28), which implies a 9% downside to Tuesday’s closing price.
Nowak commented, “Constructive advertiser conversations, improving user growth, and positive revisions make a more compelling risk/reward. Recent advertiser conversations continue to be incrementally positive about Twitter’s ad business.” In addition, “We believe Twitter’s video ad product continues to perform well as advertisers continue to look for higher quality online video impressions,”
Most analysts are gravitating on a fine sidelined line when it comes to the social networking firm’s prospects, with TipRanks analytics demonstrating TWTR as a Hold. Based on 25 analysts polled in the last 3 months, 4 rate a Buy on Twitter stock, 16 maintain a Hold, and 5 recommend a Sell. The 12-month average price target stands at $28.45, marking a nearly 11% downside from today’s closing price.