Tesla Worst Performing S&P 500 Stock Year-To-Date: Analyst Warns More Trouble Ahead With 'Slower EV Demand'

Electric vehicle leader Tesla Inc TSLA has been one of the leading producers of EVs over the last five years.

After a strong recovery for its stock in 2023, Tesla shares have turned into one of the worst performers over the last three months.

What Happened: The S&P 500 Index has been setting new all-time high records in 2024 passing the 5,000 level.

The SPDR S&P 500 ETF Trust SPY, which tracks the index, is up 33.6% over the last year and up 8.3% year-to-date in 2024. The index and ETF have been helped by the performance of the Magnificent 7 stocks.

The seven stocks of Amazon.com Inc AMZN, Meta Platforms META, Apple Inc AAPL, Microsoft Corporation MSFT, Alphabet Inc GOOGGOOGL, NVIDIA Corporation NVDA and Tesla have helped boost the S&P 500 over the last year.

Year-to-date though, two of the seven key stocks are negative with Apple down 9.9% and Tesla down 34.4%. Overall, the SPDR S&P 500 ETF Trust is up 8.3% year-to-date in 2024.

Turns out Tesla isn't just underperforming as a member of the Magnificent 7, the stock is also underperforming in the S&P 500 Index.

As of Thursday, the stock is now the worst performer in the S&P 500 Index year-to-date.

Compare that to top performers like Nvidia up 83.5%, Constellation Energy CEG up 43.6% and Meta Platforms up 40.0%.

Tesla is one of only seven stocks in the S&P 500 Index that is down 20% or more in 2024. Right behind Tesla is The Boeing Company BA, which has fallen 30% in 2024.

Related Link: Wedbush’s Dan Ives On Recent Tesla Downgrade: ‘Even The New York City Cab Driver Is Bearish’

What's Next: Two and a half months into 2024, Tesla ranks as the year’s weakest performer so far, with concerns that further declines may lie ahead.

Analysts have been cutting their ratings and price targets on Tesla citing weak consumer demand and struggles for the electric vehicle giant.

UBS analyst Joseph Spak lowered the price target from $225 to $165 while keeping a Neutral rating. The analyst also lowered delivery forecasts for Tesla for the first quarter and full year. The analyst now sees the company delivering 432,000 vehicles in the first quarter (down from 466,000) and 1.96 million (down from 2.02 million) for the full fiscal year.

"Our revision is driven by slower EV demand (US, Europe) and slower production in NA and Europe," Spak said.

The analyst also lowered earnings per share estimates for Tesla for the first quarter and full fiscal year. Tesla is expected to report first quarter financial results in April.

On Wednesday, Wells Fargo downgraded Tesla shares from Equal Weight to Underweight and lowered the price target from $200 to $125.

The analyst said Tesla could have "disappointing deliveries" and more price cuts could be coming for the automotive company.

Former strong supporters of Tesla stock are also issuing warnings.

Ross Gerber said he's concerned that Tesla is limiting itself to not selling more than two million cars annually with a lack of advertising.

"Tesla investors need to face reality," Gerber said.

Investor and content creator Kevin Paffrath, commonly known as Meet Kevin, recently said he sold all the Tesla shares owned in The Meet Kevin Pricing Power ETF PP. The stock was formerly a top holding.

Meet Kevin said he was "going short Tesla" with recognition of more downside ahead. The investor cited the Federal Reserve and concerns over Tesla CEO Elon Musk focusing on other things like running Twitter and looking into border patrol.

"I think, it's unfortunate the situation Tesla is in and I don't think all of the bad is priced in yet so unfortunately I think it's going to get a lot worse before it gets better," Paffrath said.

TSLA Price Action: Tesla shares fell 4.12% to $162.50 on Thursday, versus a 52-week trading range of $152.37 to $299.29.

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Image created using artificial intelligence with Midjourney.