Tesla's YTD Drop Reaches 37% Despite Job Cuts: Wall Street's Perspectives Ahead of Q1 Earnings Release
Tesla is laying off more than 10% of its global workforce, as it grapples with falling sales and an intensifying price war for electric vehicles (EVs). Tesla stock declined for two consecutive trading days, closing at $157.11 on Tuesday, with its year-to-date loss extending to 37%.
"About every five years, we need to reorganize and streamline the company for the next phase of growth," CEO Elon Musk commented in a post on X. Two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, also announced their departures.
Usually, when a company announces job cuts, its stock price jumps, as investors applaud the cost-saving measures and anticipate higher profits in the future.
But Tesla's stock decline following its round of job cuts is being met with caution on Wall Street, weak demand for electric vehicles and first-quarter deliveries that badly missed expectations forced Wall Street to cut price targets on Tesla.
Tesla price target lowered to $120 from $125 at Wells Fargo
Wells Fargo lowered the firm's price target on Tesla to $120 from $125 and keeps an Underweight rating on the shares. The firm expects a Q1 miss from Tesla but says expectations are low after the weak deliveries report. The company's poor fundamentals may be overshadowed on the Q1 call by full self-driving "razzle-dazzle," the analyst tells investors in a research note. "Once the show is over, fundamentals should matter again," contends Wells. It forecasts Q1 earnings per share of 40 cent, below the consensus of 54 cent.
Tesla price target lowered to $180 from $196 at Citi
Citi lowered the firm's price target on Tesla to $180 from $196 and keeps a Neutral rating on the shares. The analyst updated the company's model to reflect the Q1 delivery miss and early-April data. The firm awaits a "more convincing entry point" into the shares. It agrees with Tesla's emphasis on the RoboTaxi. Citi notes Tesla will compete with the likes of Waymo, Cruise and Motional in dense urban domains.
Moreover, Jefferies analyst Philippe Houchois lowered his Tesla price target to 165 from 185
Houchois expects Tesla will deliver 1.77 million vehicles in 2024, below the 2023 record of 1.81 million. The analyst also reduced his 2024 EBIT and EPS estimates by around 30% to $6.5 billion and $1.87, respectively. With Tesla reporting first-quarter earnings on April 23, Houchois wrote the situation continues loading "more drama into Q1 results," including questions about product priorities and leadership.
Jefferies also expects Q1 cash burn should be "heavily negative."
However, despite the bearish sentiment surrounding Tesla being quite loud, there are still analysts who are not so pessimistic about Tesla's future.
According to Reuters, the EV giant has canceled its long promised next-generation $25,000 vehicle, choosing to focus on developing its self-driving robotaxi platform.
However, Chief Executive Elon Musk and others at Tesla have challenged the veracity of the report.
Following the publication of the Reuters story, Musk also announced Tesla will unveil the robotaxi on Aug. 8.
Morgan Stanley analyst Adam Jonas, a Tesla bull, wrote that canceling or delaying the Model 2, could be a "recognition that making and selling EVs in a traditional consumer model may not create lasting economic value."
Jonas added that while the firm is prepared for Tesla to unveil a robotaxi-prototype in August, it is cautious on "potential commercialization timelines for a fully autonomous taxi service."
Mooers, when do you expect Tesla's stock to stop falling and start recovering?
Source: Yahoo Finance, Reuters, Business Insider
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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MooMona : $120
151241481 : Q1 bad from sabotage at Berlin factory & genocide of Palestinians by Israel causing delay of ships from China & share price falling because Wall street unhappy with free speech on X & UAW, Jim Chanos & short selling sore losers manipulating TSLA price. The perfect storm by Musk haters?
168838 : They are all self-righteous analysts. Until now, they still haven't understood that electric cars are the inevitable future of automobiles
Pinkki_doll 168838 : That's true, but now there are more and more electric cars, especially Chinese brands. Also, when people don't have money, they have trouble eating. No matter how much money you can buy a car, unless you keep holding on until interest rates are cut and the economy recovers, then it will wake up. Otherwise, why jump into the fire pit so early.
Driver FA : When leeks know that end-to-end autonomous driving is also artificial intelligence, the stock price will skyrocket. Of course, when Chives will know depends on when Wall Street analysts blow.
Silverbat : Extremely oversold! Most sellers are Put & Naked Call trades.