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Tesla's stock rose 3.5% ahead of disappointing Q1 delivery numbers, with analysts expressing concern over declining sales in key markets and the impact of CEO Elon Musk's political activities. Wells Fargo's Colin Langan rates the stock as Underweight, citing a potential 25% EPS decline in 2025 and doubts about the upcoming affordable model and Austin Cybercab launch. Despite these challenges, the broader analyst consensus remains neutral, with a Hold rating and a $315 average price target suggesting a 17% premium over the next year.
Wells Fargo warns that Tesla stock could drop another 50% due to disappointing vehicle deliveries, declining earnings, and skepticism surrounding the launch of a low-cost model and the Cybercab network. The bank's analyst cites a significant slowdown in sales across key markets and an unattractive valuation compared to peers. With a price target of $130, the outlook remains bleak for investors.
Wells Fargo maintains a bearish outlook on Tesla, predicting a potential stock drop of over 50% due to anticipated slower delivery growth and price cuts impacting profits. Analyst Colin Langan highlights declining electric vehicle sales in the U.S. and Europe, increasing competition in China, and concerns over the Cybercab's development in Austin, Texas. The firm has set a price target of $130, down from $276, emphasizing the need for a functioning ride-hailing service by June to avoid disappointment.
U.S. President Donald Trump's proposed 25% tariffs on imported vehicles and parts may not be permanent, according to Wells Fargo analysts, who anticipate he might retract them for trade concessions. The tariffs could raise domestic car prices and potentially decrease sales volumes by 11%, impacting the automotive sector's pre-tax earnings by $67 billion. As Trump prepares to announce further tariffs, concerns grow over inflationary pressures and economic growth amid ongoing trade tensions.
Wells Fargo has lowered Tesla's price target to $130, citing a significant decline in European sales and ongoing protests as major concerns. The firm noted a more than 40% year-to-date drop in sales in Europe, raising fears of stagnation and negative momentum for the stock. Despite previous optimism regarding Tesla's AI and autonomous driving potential, analysts are increasingly skeptical about its growth prospects.
Colin Langan
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