Tesla Stock Named to Baird's "Best Ideas" List

TSLA options look affordably priced for the time being

Deputy Editor
Aug 22, 2023 at 9:21 AM
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The shares of Tesla Inc (NASDAQ:TSLA) are 4% higher premarket, after Baird added the electric vehicle (EV) giant to its "best ideas" list. The brokerage highlighted recent price cuts and expansion, amongst other potential catalysts, in its bull note.

In response, Tesla stock is on track to snap a six-day losing streak. The equity has already shed 13.5% in August, turning in three-straight weekly losses in the process. The pullback was so steep, the equity on Friday closed below its 100-day moving average for the first time since May 16. 

There's room for sentiment to improve amongst analysts, too. Coming into today, the 17 of 25 covering brokerages rated Tesla stock a "hold" or worse. Meanwhile, the average 12-month target price of $239.82 is a slim 0.4% discount to Monday's close. 

Options traders are also bearish, per TSLA's 10-day put/call volume ratio of 1.04 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 99th percentile of its 12-month range. In other words, bearish bets are getting picked up at a faster-than-usual pace compared to the last 12 months. 

For those looking to weigh in, options are affordably priced at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 46% that ranks higher than just 8% of readings from the last 12 months, indicating volatility expectations are low right now. Even better, the equity's Schaeffer's Volatility Scorecard (SVS) tally of 94 out of 100 implies it tends to outperform said volatility expectations.

 
 

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