- Tesla’s (TSLA) stock fell 6% to $263.45 on Thursday and 1.40% to $259.80 in premarket trading, contributing to a 10% drop over 5 days and a 35% decline year-to-date, driven by weak sales in Europe, China, and the U.S. and concerns over Elon Musk’s political involvement.
- TD Cowen upgraded Tesla to ‘Buy’ with a $388 price target, citing a favorable risk/reward after the pullback and potential catalysts in electric vehicles, autonomous driving, and robotics, while Wedbush’s Dan Ives, with a $550 target, sees less than 5% of global sales at risk from brand worries.
- Analysts remain optimistic despite near-term bearish sentiment, arguing that the market overlooks Tesla’s long-term value and overreacts to short-term challenges, setting the stage for a potential rebound as key developments loom in 2025.
Tesla (TSLA) is facing a turbulent period as its stock continues to slide, closing Thursday down 6% at $263.45 and dipping further by 1.40% to $259.80 in premarket trading. This latest decline caps a bruising stretch, with shares tumbling over 10% in the past 5 days and a staggering 35% year-to-date, reflecting investor unease amid a confluence of challenges and uncertainties. Yet, amidst the gloom, Wall Street analysts are striking a cautiously optimistic tone, pointing to Tesla’s long-term potential as a counterweight to its near-term struggles.
The electric vehicle giant’s performance has been under intense scrutiny, with lackluster sales figures from key markets like Europe, China, and the U.S. in January and February fueling bearish sentiment. Adding to the pressure, concerns over brand perception have escalated, driven by CEO Elon Musk’s high-profile political engagements, notably his association with the Trump administration and the DOGE initiative. Wedbush analyst Dan Ives, a staunch Tesla bull with a $550 price target – the highest among analysts – acknowledges these headwinds, describing the current sell-off as a “gut check moment” for investors. However, Ives and his team estimate that less than 5% of Tesla’s global sales are genuinely at risk from these brand-related worries, arguing that the market has overblown the negative narrative surrounding Musk’s political forays.
On the flip side, TD Cowen has emerged with a fresh perspective, upgrading Tesla to ‘Buy’ from ‘Hold’ and raising its price target to $388 from $180. The firm’s analysts see the recent pullback as an opportune entry point, citing “potentially game-changing level catalysts” in Tesla’s pipeline. These include advancements in electric vehicles, autonomous driving technology, and robotics—areas where Tesla continues to push boundaries despite its current woes. The upgrade reflects a “tactically bullish” stance, with TD Cowen emphasizing that the stock’s risk/reward profile has tilted favorably after retreating from recent highs. This optimism hinges on Tesla’s ability to deliver on these transformative initiatives, which could redefine its trajectory in the coming year.
The dichotomy between Tesla’s immediate challenges and its lofty ambitions underscores the polarizing views on Wall Street. Ives, who recently added Tesla to Wedbush’s best ideas list, contends that investors are missing the forest for the trees, fixating on short-term sales softness and Musk-related noise rather than the company’s intrinsic value. With the stock down 35% this year, the bears have seized control of the narrative, but analysts like Ives and TD Cowen see a silver lining. They argue that the sell-off has created a disconnect between Tesla’s market price and its potential, particularly as the company approaches several pivotal milestones in 2025. Whether Tesla can weather the storm and capitalize on its innovation pipeline remains the critical question, but for now, the stock’s volatility reflects a battle between near-term skepticism and long-term faith in its disruptive vision.
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