Could Tesla Inc (TSLA) become a winning stock in 2024?

January 04, 2024 04:25 AM PST | By Invezz

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Could Tesla Inc (TSLA) become a winning stock in 2024? — Image source: Invezz

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Tesla Inc. (NASDAQ:TSLA) reported robust performance in 2023. Production and delivery of electric vehicles hit 1.8 million after growing by 38% year-on-year. The target for 2024 exceeds 2.2 million EVs. Tesla can expect positive cash flows by 2025 if the growth rates materialise. Investors want to understand how the company might perform in the capital markets.

Tesla’s leadership in the EV industry made the company a winning stock in 2023. However, its leadership is being challenged by BYD. BYD sold more than 3.0 million compared to Tesla’s 1.8 electric vehicles in 2023. Three factors compound the competitor’s edge in the EV market. The three factors include pricing, interest rates, and market access.

Tesla models are priced higher than the competition. Buyers face high interest rates. In China, the world’s largest EV market, BYD has the upper hand. The silver lining for Tesla is its brand, global image, and sales growth potential in Europe and the Middle East. The pricing pressure could be mitigated in part by stable monetary policy. However, Tesla could be forced to offer huge discounts.

While the competition is formidable, Tesla’s supremacy shall continue through 2024. We project strong sales growth. As Tesla battles for market leadership, investors can expect significant returns on the stock. The potential for positive cash flows will be a major force driving the stock.

Tesla has support at $220 and resistance at $290

Technical analysis shows an upward trend in Tesla stock price based on the moving averages. However, the RSI is at 44.40 and declining. The price could decline slightly from the current valuation of $238. If that happens, there is a high likelihood that the price will stay below $220. That is also the point at which the RSI could trigger the buy signal. The medium-term to long-term view is that the stock will appreciate.

Summary

Tesla faces formidable competition, but the brand is still the best EV in the market. Despite the price-based competition, Tesla will grow sales throughout the year. The potential for positive cash flows by 2025 makes Tesla a winning stock.

The post Could Tesla Inc (TSLA) become a winning stock in 2024? appeared first on Invezz

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