Tesla Inc. shares TSLA could face renewed pressure on Wednesday after Wells Fargo downgraded the stock from Equal Weight to Underweight.
The analyst firm also significantly reduced the price target from $200 to $125, suggesting a potential 30% downside, according to Benzinga Pro data
Analyst Concerns: The downgrade cites concerns about “disappointing deliveries & more price cuts,” which the analysts believe will lead to “negative EPS revisions.” They predict flat sales volumes in 2024 and a decline in 2025. Additionally, they anticipate lower lease residuals, disgruntled customers, and a potential loss of the luxury brand premium due to recent price cuts.
Investor’s View on Estimates: Tesla bull Gary Black of Future Fund previously warned about a potential downward revision of delivery estimates by Wall Street analysts. He believes the current consensus estimate of 474,000 units for the first quarter is too high and models a lower figure of 425,000 units. Black further commented that analyst downgrades often reflect concerns about near-term expectations like volumes, revenue, and earnings, rather than solely focusing on long-term valuation.
Pre-Market Performance: Tesla’s pre-market trading reflects the pressure, with the stock price down 2.01% to $173.97.
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