A 'boxing match with the SEC is the last thing investors wanted': Here's what Wall Street is saying about Elon Musk's latest battle with the SEC

Rating: Underweight

Price target: $230

"Should the SEC again seek to remove Mr. Musk, we estimate TSLA shares could approach but perhaps not breach 52-week lows," analysts led by Ryan Brinkman wrote to clients Tuesday.

"The SEC is requesting the Court find Mr. Musk in contempt, but did not on Monday request any specific remedy. In particular, it has not requested to set aside the earlier settlement which led to the withdrawal of securities fraud charges and its request Mr. Musk be barred from serving as an officer of any public company, including Tesla."

That's what the analysts view as a "worst case scenario," the likelihood of which is difficult to judge at this point.

If the SEC were to seek Musk's removal, the analysts wrote, shares may approach — though not retest — the mid-$200 levels seen in the aftermath of the suit over Musk's infamous "funding secured" tweet.

Rating: Underperform

Price target: $245

"It will be up to a federal judge to determine whether Musk is in contempt and what the penalties would be (or the SEC and Musk would have to reach a settlement)," analyst Joseph Spak wrote to clients Tuesday.

"We won't opine on the ruling potential. But in our opinion, given that the SEC arguably let Musk off lightly for his first settlement, and given that he has taunted the SEC (see the 60 Minutes interview [December 9, 2018] during which he stated, 'I don’t respect the SEC'), we believe the SEC will seek a harsher penalty/settlement."

Spak said he is again reminded of the "seemingly inadequate corporate governance at Tesla in this regard."

Rating: Outperform

Price target: $430

"Based on our understanding, we do not think there may be material risk of a change to Mr Musk's role at Tesla," analysts Maynard Um and Tim Liu wrote to clients Tuesday.

"The bottom line is that the SEC is looking for strict enforcement of the policy, which we believe ultimately will be dictated by Mr Musk rather than the Board."

Rating: Sell/High Risk

Price target: $273

"Recall that our Tesla downgrade last year (to Sell/High Risk) came right after the SEC's original actions against Tesla," analyst Itay Michaeli wrote in a report on Tuesday. "We view this escalation as a negative and expect Tesla shares to come under pressure at least until some clarity is achieved."

Michaeli said while the motion's outcome could plausibly range from nothing of material impact to Musk's removal, it's difficult to predict.

The escalation comes at a particularly delicate time for the company after recent management departures, including the company's CFO, he added.