Recommendations, ratings and target price of Tesla Inc. have been downgraded on a daily basis as downside risks to 1Q24 and 2024 consensus deliveries worry global analysts, while several other producers are scaling back their EV production plan.
Despite CEO Elon Musk’s attempt to ramp up sales in the final quarter last year by slashing prices of several models, its full-year delivery, though, increased 38% to 1.81 million, slightly missed the Street expectations.
Meanwhile, the financial results from the company missed both top and bottom line, but margin beat expectations.
The results were so disappointing that after the earnings report CNBC Mad Money’s Jim Cramer said the EV giant is no longer a Magnificent Seven stock.
UBS and Wells Fargo are one of the latest firms that downgraded Tesla with a revised target price that is now lower than the current trading price.
The Swiss financial provider slashed Tesla’s target price from $225 to $165, while lowering 1Q24 delivery forecast from 466,000 to 432,000, which is about 10% below the market consensus of 477,000 units. UBS stated that the revision was driven by slower EV demand, especially in the US and Europe, and slower production due to power outage. Its delivery forecast for 2024 is now slashed to 1.96 million, compared to 2.02 million in earlier estimates, and about 5% below consensus of 2.06 million units.
Wells Fargo downgraded Tesla to “Underweight” and cut target price from $200 to $125 per share, while also voicing the same concern as the Swiss bank. Wells Fargo expected sales volume to flat this year and down next year, calling the EV giant a growth stock with no growth.
According to LSEG, about 40 brokers have been revising their recommendations and target price for Tesla this year. The current consensus target price remains well above the trading price at $202.62 per share, but has fallen from around $225 at the end of last year. There are 17 BUY recommendations, 21 Hold and 10 Sell. The share price of Tesla is now -10% the past month and -30% for the year.
It has been reported that automakers such as General Motors, Ford Motor, Volkswagen, Mercedes-Benz and other big names are scaling back their electric vehicle plans.
Marin Gjaja, chief operating officer of Ford’s EV unit told CNBC that what the market has seen in the past few years is “ a temporary market spike where the demand for EVs really took off.”
