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Since JPMorgan’s Tesla Sell Signal in 2018, TSLA Stock Is Up by a Staggering 48.9%

Last Updated September 23, 2020 1:26 PM
Joseph Young
Last Updated September 23, 2020 1:26 PM
  • Since a JPMorgan analyst predicted a headwind for Tesla in 2018, TSLA is up 49%.
  • Traditional car makers have struggled to present a challenge to Tesla’s dominance in 2019.
  • 2020 looks even brighter for the automaker with rising sales and maturing management.

In 2018, as reported by CNBC, a JPMorgan analyst said Tesla stock is poised to face a meaningful headwind  due to increasing competition from Mercedes Benz (Daimler), Audi, and BMW. Tesla stock (NASDAQ: TSLA) is up from $290 to $432 since. JPMorgan analyst Ryan Brinkman said last year:

When similarly priced high-end long-range electric vehicles become available from prestigious brands with strong reputations for both service and build quality, we believe this could represent a meaningful headwind for Tesla.

Competition is strong but Tesla is way too far ahead of the pack

Most of the concerns around Tesla from analysts last year were centered around whether the company can compete against traditional automakers in the same market.

Even up until early 2019, Tesla faced a serious cash crunch  due to major debt payment deadlines, bringing more instability into the operations of the automaker.

However, as the popularity of electric cars showcased by the likes of Audi (e-tron), BMW (i3), and Volkswagen (e-Golf) fell behind Tesla’s Model 3 by a large margin, TSLA stock started to gain new momentum.

Especially in the U.S., Tesla has consistently dominated the local electric car market in the past year. A new report revealed that Tesla accounted for 77% of new electric car sales in the U.S. in November.

The figure comes after the firm maintained a 75% to 85% share of the U.S. electric car market  throughout the third quarter of 2019.

elon musk
Source: Twitter 

Three main potential catalysts in 2020

After being up 48.9% since last year, the company still has significant room for growth in the upcoming year.

tesla stock
Tesla stock is up by 49% since April 2018 | Source: Yahoo Finance

Three driving factors for a potential extended rally for TSLA stock in 2020 are: maturation of the company in becoming more like a traditional automaker , dominance over U.S. and European electric car markets, and the public’s reception of its new product lines such as the Cybertruck.

Jim Cramer, host of CNBC’s Mad Money, said about Tesla’s development as a corporation:

I’ve got to tell you: Ford sounded like Tesla, and Tesla sounded like Ford. Tesla was like listening to a call from a real company that made cars and made money. It was seamless. How about China? The fastest to grow, to put up a factory and hire people. This was – I’m not saying it was subdued [CEO] Elon [Musk], but it was a guy who makes cars. I enjoy this kind of not-wise-guy Elon.

What investors would consider as minor achievements, such as a large German taxi operator Taxi Norman adding 50 Tesla Model 3s to lessen fuel and maintenance costs , have further strengthened the firm’s presence in Europe.

The taxi firm’s managing director said that an old car costs about $6,600 a year for maintenance. But with Tesla, it is much easier to care for and drivers also save more money on fuel.