Tesla Inc. (NASDAQ: TSLA) finds itself at a pivotal crossroads. Fluctuating stock prices, speculation about its next-generation vehicles, and the backdrop of its intense competition lead to a divided outlook from analysts.
As reported by Investors Business Daily, Wells Fargo downgraded Tesla’s stock price target from 200 to 125.
Tesla’s turbulent market performance
Tesla’s market performance is lower than expected. This is likely due to lower-than-expected first-quarter sales, vehicle price cuts, and concerns about the feasibility of its next-generation vehicle, widely known as the Model 2.
As of March 13, 2024, Tesla’s stock is down by 4.5%, closing at $169.50. This is the lowest price point this year and also the lowest since May 2023. FactSet anticipates Tesla’s earnings per share (EPS) to be $3.03 this year – a slight decline of 2.2% from the previous EPS.
Bloomberg quotes Adam Sarhan, CEO of 50 Park Investments, saying: “The market is voting and telling us that it believes Tesla does not currently deserve that high valuation. For now, sellers are in control, and the market needs a bullish catalyst to get excited about.”
Moreover, the debate around Model 2 continues to rage, focusing on the next-gen vehicle’s affordability, production timeline, and potential impact on the electric vehicle (EV) market. Analysts believe that producing a high-quality, low-cost EV could compromise Tesla’s performance and safety standards.
Analysts’ views
In a note to investors on Wednesday, Wells Fargo analyst Colin Langan said Tesla is a “growth company with no growth.” Langan predicts sales will slow down this year, significantly dropping in 2025.
However, Wedbush Securities analyst Dan Ives remains positive about Tesla’s prospects despite the recent challenges. He believes the stock price will rise to $315 and predicts the number of sales this year.
There is hope, despite Ives saying the “Tesla narrative is as negative as we have seen in the last few years with [Elon] Musk and Tesla getting attacked by the bears from all directions.”
Tesla’s competition
Beyond the stock rollercoaster, Tesla has been facing a series of misfortunes, controversies, and competition lately. Earlier this year, a biohazard alert was issued when a ship carrying Tesla cars was sent back to Shanghai, China.
Australian authorities discovered a stink bug infestation on board. It’s unclear how many of the ship’s 6,500 vehicles were Tesla, but needless to say, customers had to wait weeks for their vehicles.
Later, the US National Highway Traffic Safety Administration (NHTSA) investigated 956 crashes where Tesla’s autopilot software was allegedly used. NHTSA called on Tesla to explain its safety metrics.
Competitors have also been lining up to take on the EV giant. Chinese contender XPeng has ambitious plans to go global. Meanwhile, Huawei is leaping into EV charging territory as it prepares to roll out ultrafast chargers across China.
NOW READ: Fast EV charging: Huawei takes on Tesla in China
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
