Tesla Downgraded: Is the Rally Over?
Does the above picture remind you of 1991 US movie “Thelma and Louise” ‘s last scene where the two women decided to drive off a cliff instead of being apprehended by the cops?
It is definitely “death by choice”.
The above picture also resembles the “deep shit” status Tesla is encountering now.
Bad news - one after another!
In March 2024 alone, four notable funds houses downgraded Tesla:
(1) Citibank, Analyst, Itay Michaeli:
On Wed, 27 Mar 2024, analyst lowered price target from $224 to $196.
Rating: Neutral.
Q1 Delivery: Revised down from 473,300 to 429,9000 EVs.
This is a massive, short of 43,400 EVs. Will leave it to the fans to translate that into top line, bottom line and margin.
Michaeli also said - (a) Tesla's Q1 looks tough on aggressive consensus estimates and Wall Street estimates look too high for 2024 and 2025.
(2) Bernstein, Analyst, Toni Sacconaghi:
On Tue, 26 Mar 2024, analyst lowered price target from $150 to $120; massive -32% marked down.
Rating: Underperformed.
Projected EPS (2025): $2.22.
Q1 Delivery: Revised down from 490,000 to 426,000 EVs.
A massive cut of -64,000 EVs off initial forecast.
Sacconaghi also said that (a) Tesla has experienced "soft" demand in China & Europe in Q1 2024 and (b) production constrained for its Model 3.
(3) UBS, Analyst, Joseph Spak:
On 14 Mar 2024, UBS cut price target from $225 to $165; a -26.67% mark down.
Rating: Neutral.
Q1 Delivery: Revised down from 466,000 to 432,000 EVs.
2024 Delivery: Also revised down from 2.02 Million to 1.96 Million.
(4) Wells Fargo, Senior Analyst - Colin Langan:
On Wed, 13 Mar 2024, the senior analyst lowered price target from $200 to $120.
Rating: Hold (only).
2024 earnings per share (EPS): Lowered from $2.40 to $2.00.
Main concerns over the waning impact of price cuts.
Parting comments - Tesla is growth company with no growth !
Supporter.
Despite the waves of downgrades, there remains an optimistic analyst.
(5) Wedbush Securities, Analyst, Dan Ives
He maintains a price target of $315.
Rating: Outperform.
Q1 Delivery: Expects around 430,000 EVs.
Optimistic that many of the price cuts will be “starting to subside into spring/summer 2024,” that will be good news for Tesla and the EV industry1.
Keep in mind that Tesla’s stock performance has been volatile, and Wall Street consensus now predicts 2024 earnings below 2023’s level, signaling another year of negative growth for this growth stock.
Analysts expect Tesla earnings per share of just $3.03 in 2024.
- For March 2024, Tesla has lost about -13. 25% to its stock price.
- It bottomed on 14 Mar 2024 at $162.50.
- With the US market all the rage, it is no wonder that Tesla is still rising.
- Bullish for all the wrong reasons.
- Do you think the analysts are right to downgrade Tesla?
- Do you think Tesla will continue to fall until it's Q1 2024 Delivery announcement on 02 Apr 2024?
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