TSLA Downgrade: "A Growth Company with No Growth"
$Tesla (TSLA.US)$ faced a new challenge when Wells Fargo voiced concerns about its future as they lowered its rating on Tesla, citing a less-than-stellar outlook for the company's first-quarter vehicle deliveries, recent price reductions, and doubts surrounding Tesla's much-anticipated new model.
Summary:
- Tesla's stock rating downgraded to 'underweight'
- Price target reduced from $200 to $125
- 4.5% decline in Tesla's stock price for the day
Specifically, Wells Fargo shifted its stance on Tesla from "equal weight" to "underweight," which is akin to advising investors to sell. They also trimmed their price target for Tesla from $200 to $125.
This adjustment suggests they believe Tesla's stock could fall by 30% from its current levels. Their caution stems from an expectation that Tesla's sales volumes might not meet forecasts, suggesting that recent price cuts aren't boosting demand as hoped. Moreover, they're skeptical about the economic viability of Tesla's upcoming "Model 2," which aims to capture the mass market with a more affordable compact vehicle.
“While an EV & battery tech leader, TSLA screens poorly relative to Mag 7 peers, trading at 58x PE vs. peers at 31x. Yet, TSLA has a similar outlook for consensus 3-year EPS growth (19% vs. 23% Mag 7 avg).””
Analysts from Evercore recently suggested that Tesla's new, lower-priced vehicle might not hit the market in significant numbers until 2027, projecting a production of 500,000 units in 2026 and essentially tagging Tesla as a story unfolding over the next few years.
Despite this backdrop of skepticism and a 28% decline in Tesla's stock in 2024, some are holding onto their optimism. Dan Ives of Wedbush Securities, a steadfast Tesla supporter, continues to see a bright future. Although he predicts first-quarter deliveries around 430,000—short of the wider expectation of 487,000—he believes numbers will improve as the year progresses.
From his recent trip to Asia, Ives reports that price reductions might soon slow down, which could spell good news for Tesla and the broader EV market. Amidst what he describes as an unprecedented wave of negativity towards Tesla and Elon Musk, Ives maintains that the current dip in Tesla's stock is an overreaction, suggesting that demand for Tesla vehicles is simply stabilizing.
As the industry watches, Tesla's journey illustrates the volatile intersection of innovation, market expectations, and the realities of scaling up in a rapidly evolving automotive landscape.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
- YouTube finance content creator (>70k subs)
- Specializes in US stock and ETF investments
- Huge fan of Tech companies
28KFollowers
5Following
54KVisitors
Follow
ZnWC : Ives said the current bearish narrative is similar to those seen a number of times over the years, when doubters who said Tesla's time to shine was over and EVs were just a fad had been proven wrong. And while Ives said EV demand has clearly moderated, he expects sales and profitability to improve in the coming quarters.
Wedbush reiterated buy rating on Tesla stock retains $315 price target
https://www.moomoo.com/community/feed/112088639995910?share_code=00M7lA
Ziet Invests OP ZnWC : it’s definitely an optimistic POV - but with Model 3 and Y struggling to make sales, and Model 2 nowhere to be seen, Cybertruck slow to ramp up sales due to production issues, Optimus/FSDis the remaining hope for a full-on recovery
ZnWC Ziet Invests OP : Ives wrote, "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."
He said the stock's risk-versus-reward profile is "extremely compelling" at current prices. Ives envisions a valuation for Tesla exceeding $1 trillion, compared with the current market cap of $565.4 billion, as the artificial-intelligence and full-self-driving programs are making "major strides" at the company.
ZnWC Ziet Invests OP : I think you miss out this information.
Tesla unveil next-gen Roadster - collaboration between Tesla and SpaceX
https://www.moomoo.com/community/feed/112008380416406?share_code=00MaUe
Robert Walla : Yupp... apt title Ziet. Price cutting in place to fight competitors. Profit margin going down. Big boss reported wanted high % ownership to put in more AI n tech into Tesla .. n now X appears to be focus area.
ZnWC : I find this amusing.
lets hope you guys didn’t sell because of him
ZzSAMUS :
https://www.moomoo.com/community/feed/112100724113413?share_code=00Mi0v
Digibles : Tesla still has one of the worst inherent price value to actual stock price in any market
BelleWeather : Do people actually invest in Tesla for the car business? That seems loony to me!