Summary
- JP Morgan downgraded Tesla stock to $120, followed by other leading US banks
- Tesla stock decreased by almost 5% on March 17 while the overall market went up
- Wells Fargo lowered their price point to $130, citing weak demand for Tesla vehicles
- UBS reiterated its sell guidance on Tesla stock, concerned about weakening demand for Model 3 and Model Y
- Redburn Atlantic set a target price of $160 for Tesla stock, citing stagnating sales and weak demand, exacerbated by trade wars and tariffs
Article
Last week, JP Morgan downgraded Tesla’s stock to $120, with Wells Fargo also trimming its price point to $130. UBS and Redburn Atlantic also expressed concerns about Tesla’s ability to recover from its slump. Tesla’s stock slid by almost 5% on March 17, further validating the concerns raised by these financial institutions. Wells Fargo had already been calling it low earlier in the month at $135, and the stock was down 40% from the beginning of the year.
The decline in Tesla’s stock is not just due to weak demand, but also reflects issues with CEO Elon Musk’s public behavior and the company’s sales performance in Europe and the US. UBS reiterated its sell guidance on Tesla stock, citing weakening demand for the Model 3 and Model Y. The competition is also becoming more aggressive in the electric vehicle market, with Toyota introducing new BEVs in Europe and hinting at more to come. Sales drops have been noted in Australia and China as well.
Redburn Atlantic, a financial analysis firm, set a target price of $160 for Tesla stock, citing stagnating sales activity and weak demand. The ongoing trade wars and geopolitical tensions also played a role in their analysis. Mizuho Group, a Japanese financial firm, had previously praised Tesla’s margins and profitability but has since lowered its target price from $515 to $430. Competition in China and external factors like tariffs have also impacted Tesla’s stock performance.
Tesla’s full self-driving (FSD) technology has been a point of contention, with concerns about its feasibility and the company’s ability to deliver on promises. While Tesla has offered promotions like a free month of FSD in China to boost sales, concerns about the technology remain. Despite a slight increase in registrations in China, Tesla’s stock continued its downward trend, with a ninth straight week of losses. The competition in the electric vehicle market and geopolitical factors have added to the challenges facing Tesla.
The overall sentiment among financial analysts and institutions is cautious about Tesla’s stock performance and future prospects. Tesla’s continued decline in the stock market reflects broader concerns about its sales performance, competition in the electric vehicle market, and internal challenges. The company’s ability to navigate these challenges and adapt to changing market dynamics will be crucial in determining its future success. Investors and analysts will be closely monitoring Tesla’s performance in the coming months to gauge whether it can reverse its current downward trajectory.
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