Why Tesla Shares Are Trading Lower Monday

Tesla, Inc. TSLA shares are moving to the downside, extending the lackluster run seen for much of this year.

Here are a few factors imparting negativity to the stock.

Lock-Step With Broader Market: The broader market has been highly volatile since late February, with tech stocks bearing the brunt of the sell-off. The current downturn in the market has seen sector rotation out of tech stocks.

After Tesla hit a split-adjusted high of $900.40 in late January thanks to its fourth-quarter earnings report, it pulled back sharply and plummeted to a low of $539.49 in early March.

Subsequently, the stock entered a consolidation phase, with sentiment largely dictated by the broader market. Some have blamed the weakness on the company's decision to embrace bitcoin.

Related Link: What To Expect When Tesla Reports Q1 Deliveries

Negative Analyst Action: On Monday, Jefferies analyst Philippe Houchois maintained a Hold rating on Tesla shares and lowered the price target from $775 to $700. The repricing seen in shares in recent months, according to the analyst, makes sense on an absolute basis and relative to legacy automakers.

The analyst said the stock move was not related to fundamentals and that 2021 is likely to be a year of execution.

Jitters Ahead of Pre-Q1 Deliveries Update: Tesla is scheduled to report its first-quarter deliveries update this week. Sell-side is bracing for strong numbers. With more traditional automakers and EV players disclosing production hit from chip shortages, some on the Street see the predicament not sparing Tesla either.

Tesla shares were slipping 1.5% to $609.38, having lost about 12% year-to-date.