Tesla Inc. shares (NASDAQ: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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