12:26 PM EDT, 03/13/2024 (MT Newswires) -- Tesla (TSLA) is likely to see growth and margin improvement in the coming quarters despite the near-term headwinds it is facing, including the slowdown in global demand for electric vehicles, Wedbush said in a note Wednesday.

Analysts said the negative sentiment around the company and Chief Executive Elon Musk is way overdone.

"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 is on the roadmap for the next year," Wedbush said.

The demand will remain sluggish during Q1 while the Berlin arson shutdown and the Delaware court's ruling on Musk's compensation package add to the near-term issues, according to the note.

Wedbush said that the risk-reward for Tesla is very attractive with AI and full self-driving progress, potentially leading to a valuation surpassing $1 trillion as the company's growth story unfolds further.

Tesla's board must revise the compensation package, devise a plan for Musk's voting share, and relocate Tesla to Texas to address investor concerns and improve the company's outlook, analysts said in the note.

Wedbush reiterated its outperform rating on Tesla and kept the price target at $315.

The company's shares were down 3% in recent trading.

Price: 172.20, Change: -5.34, Percent Change: -3.01