Tesla (NASDAQ:TSLA) consistently captures attention on Wall Street, but this week, anticipation is particularly high. That’s because on Thursday (June 13th), at its annual meeting, shareholders will vote on whether CEO Elon Musk’s 2018 $56 billion compensation package will be reapproved after a Delaware court voided it early this year.
Wedbush analyst Daniel Ives acknowledges that this issue has sparked heated debate among investors but expects a conclusive resolution on the horizon
“We would expect the 2018 package will be overwhelming reapproved and the Delaware court ruling would be moot in essence as Tesla will now be moving to incorporate in Texas,” Ives said. “This issue has been an overhang on Tesla’s stock and this will be important to move this distraction in the rearview mirror.”
The outcome of the vote could also influence Musk’s future actions, as he has hinted at pursuing AI-focused endeavors elsewhere if he doesn’t prevail. As such, Ives hopes the package’s approval will ensure Musk will “commit that all AI initiatives will be under the Tesla hood and will be not be separated.”
Ives identifies autonomous driving and Full Self-Driving (FSD) as “key to Tesla’s future,” and expects Musk to emphasize this at the meeting. Moreover, to further gain investor confidence, Ives thinks Musk must also recommit to staying on as Tesla CEO for the next 3 to 5 years.
The next big event in the Tesla calendar is set to follow on August 8 with the “highly anticipated” robotaxi reveal. While cognizant of the many difficulties Tesla currently has to deal with, Ives thinks there’s plenty to look forward to in Teslaverse.
“Clearly Tesla is going through a challenging period of delivery growth and this story will not turnaround overnight so patience is required,” he summed up. “However, it now feels that Musk is taking tighter control of the reigns of Tesla with a lower cost vehicle on the roadmap, cost cuts to manage this soft period of growth, FSD advancements, and ample financial power/treasure chest to navigate this near- term demand storm.”
All in, Ives rates Tesla shares an Outperform (i.e., Buy), backed by a $275 price target. The implication for investors? Upside of ~55% from current levels. (To watch Ives’ track record, click here)
Ives definitely belongs in the Street’s TSLA bull camp, but most aren’t quite as enthusiastic. Based on a mix of 14 Holds against 9 Buys and Sells, each, the stock claims a Hold (i.e. neutral) consensus rating. At $174.60, the average target implies the shares will stay rangebound for the time being. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
