1 day Ago
Tesla had a rough first quarter, and Wells Fargo doesn't see a rebound anytime soon. The bank named the electric vehicle maker an underweight tactical idea for the second quarter. It holds an a $130 price target on shares, which suggests about 50% downside potential from Monday's close.
Shares tumbled nearly 36% during the first three months of the year, marking their worst quarterly performance since the fourth quarter of 2022. Back then, they lost more than 50%. Weakening sales, as well as CEO Elon Musk's growing political profile have sent the stock tumbling.
Analyst Colin Langan sees more pressure ahead. TSLA YTD mountain TSLA year to date "A continuation of deteriorating fundamentals in the core autos business remains undeniable, while the company remains heavily overvalued vs. the Mag 7 on 2025E PE," Langan said in a note.
Meanwhile, "June Cybercab 'deployment' seems like a pipedream with limited unsupervised testing." In addition to weak demand across major markets, competition in the electric vehicle market in China is intensifying, he added. Across Europe and China, deliveries are trending 40% and 14% lower, respectively, from the start of the year through February, Langan said.
The analyst is also bearish on Tesla's expected affordable model launch around this summer, due to the lack of specifics about the model. "We see high cannibalization risk with Model 3/Y which is likely dilutive to TSLA margins," said Langan. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange.
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