Tesla Stock Declines as Market Pressures Mount Amid Analyst Divisions

Tesla’s stock fell over 8% on Monday, continuing its decline for seven weeks and erasing all post-election gains. Analysts express concerns about Musk’s political involvement and weak delivery reports, leading to varied ratings among brokers. UBS maintains a “sell” rating with a reduced price target, reflecting muted demand expectations for new models.

Tesla shares plunged over 8% on Monday morning, positioning the electric vehicle manufacturer among the principal decliners in the S&P 500. This marks a continued decline extending over seven consecutive weeks, with the stock now below its pre-election levels, having lost more than half its value since reaching a peak on December 17, when it closed at $479.86.

Concerns surrounding CEO Elon Musk’s association with the Trump administration, tariff uncertainties, and decreasing registrations in both China and Europe have exerted significant pressure on Tesla’s stock. Investors are particularly wary due to a weak fourth-quarter delivery report and the potential impact of Musk’s political ties on Tesla’s brand and sales, particularly as protests have arisen against the company’s dealerships recently.

Analysts’ opinions on Tesla’s stock are markedly divided. Among 19 brokers monitored by Visible Alpha, the ratings include ten recommending “buy,” five suggesting “hold,” and four advising “sell.” Specifically, UBS analysts reaffirmed their “sell” rating while reducing their price target from $259 to $225, and slashed their estimates for first-quarter deliveries from 437,000 to 367,000. Although they anticipate that the new Model Y and an unannounced lower-cost model will support sales, they view early demand for the Model Y as “somewhat muted” and expect lower margins for the forthcoming budget-friendly vehicle.

In summary, Tesla’s stock has experienced significant declines, erasing post-election gains and reflecting investor concerns tied to CEO Elon Musk’s political engagements and various market pressures. With analysts offering mixed reviews and lowering projections for deliveries, the company’s financial outlook remains uncertain as it navigates challenges in key international markets.

Original Source: www.investopedia.com