Tesla Inc TSLA shares are trading lower Tuesday, continuing a multi-day slide that has seen shares fall approximately 9% over the last week. Here’s a look at what’s going on.
What To Know: Tesla shares are falling again Tuesday after trading down 5.59% on Monday following reports the EV maker was planning to lay off more than 10% of its workforce.
The selling pressure on Tesla shares was intensified by news that two key Tesla execs, Drew Baglino and Rohan Patel, would be leaving the company.
“About every 5 years, we need to reorganize and streamline the company for the next phase of growth,” CEO Elon Musk said in a post on X.
The continued weakness in Tesla shares on Tuesday comes as GLJ Research analyst Gordon Johnson maintained Tesla with a Sell rating and lowered the price target from $23.53 to $22.86.
“In short, with Consensus ests. still too high, we maintain our negative bias,” Johnson said in the note.
The longtime Tesla bear warned clients that he believes Tesla could report its first negative free cash flow quarter since 2020 next week and noted that the company has excess production, waning demand and inventory build problems.
Johnson also highlighted continued weakness in insurance registration data out of China on X on Tuesday and suggested that the trends could negatively impact Tesla as it gears up to report first-quarter financial results next week.
Analysts are looking for earnings of 53 cents per share and revenue of $22.605 billion, according to estimates from Benzinga Pro. On Monday, Wedbush's Dan Ives said investors need answers from Musk.
"We need to hear the rationale for the cost cutting, the strategy going forward, product roadmap, and an overall vision from Musk otherwise many investors might head for the elevators during this Category 5 perfect storm of weak demand Tesla is seeing globally in 2024," Ives said in a note to clients.
Tesla has been getting negative attention in recent months as a result of continued cost cuts in the face of slowing demand trends. The EV maker has also turned in disappointing quarterly results in two consecutive quarters. Investors will be paying close attention to margins and the company’s outlook for the rest of the year. Ives called the coming earnings report a fork in the road for Musk and company.
TSLA Price Action: Tesla shares are down approximately 35% year-to-date. The stock was down 2.83% at $156.90 at the time of publication, according to Benzinga Pro.
Photo: courtesy of Tesla.
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