TSLA
Tesla's stock dropped 1.5% following Wells Fargo's downgrade to an "Underweight" rating. The financial giant cut its price target for Tesla by $75 to $125 per share, suggesting a near 30% downside risk from its current position. This move stems from analysts labeling Tesla as "a growth company with no growth" amid diminishing impacts from price cuts and stagnant sales projections for the next two years.
Once celebrated for its pioneering electric vehicles and battery technology, Tesla faces skepticism. The company's stock performance is notably lagging, down 28.5% year-to-date, starkly contrasting the S&P 500's 8.5% rise. Analysts are particularly wary of Tesla's future, pointing to disappointing deliveries and further price reductions as drivers of potential negative earnings revisions.
Adding to the concern is the anticipated launch of Tesla's next-gen compact SUV, the Model 2, expected in the latter half of 2025. Analysts predict that the economics of Tesla will be challenging with this mass market venture, hinting at the broader challenges the EV leader might face in maintaining its luxury brand premium and growth expectations amidst a highly competitive landscape.
