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Analysts on Wall Street Tesla’s Stock Drops, But Why Is Everyone So Negative?

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In a marked contrast to the electric vehicle (EV) manufacturer’s typical trajectory, Tesla has had a turbulent start to 2024. Wall Street analysts are growing more negative about the company’s prospects as a result of its stock falling by about 30% since the year’s beginning. Notable companies including Wells Fargo, Wedbush Securities, and Bernstein have lowered their price estimates downward and downgraded Tesla, citing a variety of issues including leadership disagreements and delivery failures.

One of the major financial firms, Wells Fargo, recently referred to Tesla as a “growth company with no growth.” Due to a slowdown in the market for electric cars and the possibility that Tesla may need to lower the prices of its goods going forward, they downgraded Tesla to “underweight” and lowered their price objective to $125 per share. They also voiced reservations over the impending introduction of the Model 2, highlighting its hurried schedule and low profitability. Wells Fargo, however, applauded Tesla for its creative manufacturing techniques and voiced excitement about the company’s next innovations, which include the Dojo supercomputer and full-self driving capabilities.

Wedbush Securities lowered its price objective for Tesla shares to $300 while keeping a “outperform” rating on the company. Analysts drew attention to Tesla’s dismal first quarter, blaming it on declining deliveries in China and problems with supplies, including the Berlin factory fire. They also emphasized the mounting dissatisfaction among investors with the company’s management, citing Elon Musk’s intention to take AI initiatives outside of Tesla and continuing legal battles in particular.

According to Wedbush Securities’ Dan Ives, “We believe the Tesla narrative is as negative as we have seen in the last few years.” He voiced concerns about declining margins and slow development, especially in the Chinese market. Ives, however, continued to be optimistic about Tesla’s prospects, highlighting the possibility that its fully autonomous driving and autopilot technology will justify its long-term values.

Bernstein lowered Tesla’s price target to $120 per share and reiterated its “underperform” rating, adopting an even more pessimistic position. Economists emphasized the weak growth outlook for 2024 and 2025, pointing out that EV adoption is decreasing in important areas such as the US and Europe. They also questioned Tesla’s high stock prices in light of its comparable profit margins when compared to its rivals. Bernstein also expressed concern about Tesla’s potential decline in competitiveness going forward due to its lack of progress in important fields like robotics and artificial intelligence.

Wall Street analysts have been increasingly pessimistic about Tesla as a result of its recent difficulties; their worries range from slowing demand to leadership disputes. Although some analysts continue to see potential in Tesla’s cutting-edge technology, others are dubious about the company’s capacity to sustain its high valuations in the face of growing competition and operational difficulties. Investors and industry watchers will be intently watching Tesla’s actions and results in the upcoming months as it makes its way through these challenging times.

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