Wells Fargo just downgraded Tesla (NASDAQ:TSLA) stock to an “underweight” rating and slashed its price target to $125 per share from $200. Some of the factors cited by the firm included pessimism about Tesla’s upcoming electric vehicle (EV), price cuts on its EVs and stepped-up competition.
On the other hand, a well-known analyst who has been historically upbeat on TSLA stock remains bullish on the EV maker. Here’s what investors should know.
Tesla and the Wells Fargo Downgrade
Wells Fargo expects Tesla’s electric vehicle deliveries to come in below average estimates because its price reductions are producing less demand than they had been previously. Further, the firm believes that the profit margins on its upcoming, more affordable EV will be rather low. Wells Fargo also expects the EV maker’s EPS to fall due to additional price cuts going forward.
With that said, however, not every analyst is bearish on Tesla. Dan Ives, a highly reputable analyst from Wedbush, has been bullish on the company for years. This morning, the analyst kept a $315 price target and “outperform” rating on TSLA stock.
Although Ives concedes that Tesla’s first-quarter deliveries will likely come in meaningfully below Wall Street’s mean outlook, he expects deliveries to climb during the rest of 2024. The analyst also expects the company’s price cuts to ease going forward.
All told, Ives believes that the decline in Tesla shares has been far too steep, given the EV maker’s fundamentals.
The Price Action of TSLA Stock
In the last five days, TSLA stock has retreated 1.5%. Shares have also declined nearly 7% in the last one month and 30% so far this year.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
