Tesla stock (TSLA) experienced a significant decline of over 15% on Monday following a bearish assessment from Wall Street, causing shares to reach their lowest point since before the presidential election and dropping more than 50% from their record high of $479 on Dec. 17. This marked the stock’s worst performance since September 2020.
In a report to clients on Monday, analysts at UBS reduced their price target for Tesla to $225 from $259, attributing the adjustment to lower delivery estimates for the first quarter due to weakened demand for Tesla’s Model 3 and Model Y vehicles. UBS maintained a Sell rating on the stock and now anticipates Tesla delivering 367,000 cars in the first quarter, a decrease from the previously projected 437,000 following the fourth quarter results announced by Tesla in late January.
The firm expects deliveries to decline by 5% compared to last year and by 26% from the prior quarter in Q1, highlighting the shorter delivery times for the Model 3 and Model Y as an indicator of reduced demand. Furthermore, news of a 49% drop in shipments in China in February, the lowest level in nearly three years, added to the downward pressure on the stock.
Despite the recent decline, some of Tesla’s prominent supporters have defended the company. Wedbush analyst Dan Ives reiterated his optimistic stance on Tesla, stating that the current market correction serves as a test for Tesla enthusiasts. He added Tesla to the firm’s “Best Ideas List” with an Outperform rating and a price target of $550. Similarly, Morgan Stanley analyst Adam Jonas reaffirmed his bullish outlook on Tesla, projecting a rise to $430 as the company expands into artificial intelligence and robotics.
While Tesla’s sales have faced competition from new entrants, CEO Elon Musk’s political involvement has also influenced the company’s performance. Musk’s support for former President Trump during the 2024 election campaign and the controversial actions of the Musk-led Department of Government Efficiency have stirred public backlash. As a result, Tesla car sales in Europe have declined, and protests have erupted at Tesla showrooms over government layoffs. Recent surveys have indicated disapproval of Musk’s political activities among voters.
In a January survey, it was discovered that the majority of voters are against Elon Musk having a significant position in the Trump administration, with 53% opposing it compared to 39% in favor. Tesla is scheduled to announce its first-quarter results on April 22. StockStory strives to assist individual investors in outperforming the market. Ines Ferre is a senior business reporter at Yahoo Finance. For the most recent stock market updates and detailed analysis on stock-moving events, follow her on Twitter @ines_ferre. Stay informed with the latest financial and business news from Yahoo Finance by clicking here.
