Tesla’s (TSLA) Risk/Reward Ratio Is Positive, Analyst says

Much of “the negative sentiment towards Tesla (TSLA) is priced into the stock at its current levels,” CFRA analyst Garrett Nelson told Schwab Network recently.

Nelson believes that the shares can reach $360 in 12 months.

Q1 Was Likely the Low Point for Tesla’s Sales, Nelson Says

Tesla’s auto sales likely bottomed last quarter, as Q1 is usually the “weakest quarter for automakers,” the analyst said. Additionally, all four of Tesla’s factories were idled for parts of Q1, Nelson noted.

Finally, although the automaker has lost a significant number of customers due to Elon Musk’s political activities, it has also gained some customers, he said.

Other Positive Catalysts for TSLA Stock

Tesla’s energy-storage business is growing rapidly and now has higher margins than its auto business, Nelson said. Moreover, the energy-storage unit had its second-best quarter in Q1, he reported.

And because TSLA has less exposure to tariffs than a number of other automakers in America, it can gain market share in the country, Nelson predicted.

Also importantly, Musk’s company has the highest gross margins in the sector and a very strong balance sheet, he noted.

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Disclosure: None. This article is originally published at Insider Monkey.