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Wolfe Research advises against or shorts Tesla, First Solar, and other stocks

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Wolfe Research has identified a list of stocks that are prime targets for short sellers, based on various screens looking at factors such as valuation, earnings quality, capital allocation, and sentiment. Among the top 10 stocks that appeared most frequently on Wolfe’s screens are Tesla, the popular electric vehicle maker, First Solar, a leading solar company, and rideshare platform Lyft.

Tesla, which has experienced a 29% drop this year after doubling in 2023, appeared on six of Wolfe’s 16 screens. While the average analyst predicts only a 3% rise in Tesla’s stock over the next year, many still hold a hold rating on the company.

First Solar, on the other hand, has seen a 60% surge in its stock price this year. Despite the big run-up, the average analyst foresees a 6% decline in the company’s shares over the next year. However, some analysts like Morgan Stanley’s Andrew Percoco believe in the company’s potential due to the increasing demand for artificial intelligence and policy support.

Lyft, the rideshare platform, appeared on four of Wolfe’s short screens. The stock has only seen a 3% increase this year but had a 36% rise in 2023. The average analyst predicts a 20% jump in Lyft’s shares over the next year, even though most analysts currently have a hold rating on the stock.

Overall, these stocks have caught the attention of short sellers due to various factors such as valuation, earnings quality, and sentiment in the market. However, analysts have differing opinions on the future performance of these stocks, with some predicting declines while others expect growth in the coming year. It is essential for investors to carefully consider all available information before making any investment decisions.

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