Tesla bearishness is overdone, and the company's board should do these 3 things to send the stock soaring again, Wedbush says

• Tesla bearishness is overdone, Wedbush Securities' Dan Ives said Wednesday.
• The board should do three things to get the stock moving up again, Ives wrote.

The bearishness around Tesla's stock is overdone, and its stock could boomerang up 77% in the next 12 months.

"We believe the stock is way overshooting on the negative front as the demand story for Tesla is more in stabilization mode heading to the rest of 2024, price cuts are moderating, battery costs/production is showing strong cost efficiencies, and a Model 2 (sub $30k vehicle) is on the roadmap for the next year," analysts led by tech bull Dan Ives wrote.

It's not all smooth sailing for Tesla in the short term, given the lackluster demand for electric vehicles, an arson attack that temporarily shut down a Berlin factory, and uproar around Musk's compensation package — a Delaware judge voided the CEO's $55 million pay package in January, siding with a shareholder who argued it was excessive.

Still, Ives reiterated that he sees the stock price hitting $315 in the next 12 months. Tesla closed at $177.54 on Tuesday.

In order to weather the storm over the stock and kickstart the rebound, Ives said there are three things Tesla's board can do.

First, they should draw up a new compensation package for Musk that's bigger than the one he got in 2018, which shareholders can vote on in their meeting in May.

Second, the board's new pay package should lift Musk's voting share up to 25% — a desire Musk has expressed — and have shareholders vote on that in May as well.

Finally, Ives wrote, the company should move its state of incorporation to Texas, where the company is headquartered. That would pave the way for the board to get the new compensation package approved, turning the Delaware ruling into "noise." It is a move Musk has voiced support for since the court decision.

Those changes, along with an improving outlook on production and price cuts, would bode well for the EV maker.

"Now is NOT the time to throw in the towel on Tesla...we have a high level of conviction at current levels despite the dark black clouds forming," Ives wrote.