An analyst report issued by Wall Street investment institution Evercore ISI on Tuesday lowered the target stock price of electric car maker Tesla from $300 to $200, mainly because of concerns about the market’s demand for electric vehicles. Tesla needs to launch its low-cost Model 2 electric car to get the stock “back on track,” analysts said.
Tesla stock is down more than 60% year-to-date from its November 2021 high. Analysts cut their price target to $200 from $300, a drop of about a third, though still about 40% above the current share price.
Analysts wrote in the report that although multiple factors such as global scale operations, vertical integration of the supply chain, and the US inflation reduction bill allow Tesla, the leader in the electric vehicle market, to continue to enjoy a gross profit margin advantage, “it is impossible to ignore Yes, investors are well aware of the benefits and must now grapple with demand assumptions from 2023 to 2025.”
Tesla shares have been under intense pressure this year, and CEO Elon Musk has continued to sell shares.
Tesla shares fell 5 percent to $142 on Tuesday. The Evercore ISI report pointed out that Tesla’s stock price has lost support at the key technical level of $150 to $163.
“Investors are also revisiting demand assumptions for the first time as global inventories dwindle,” the report said. Analysts also said that while the biggest challenge facing Tesla’s stock price is Elon Musk’s acquisition of Twitter, more factors are now at play. Dragging up stock prices. The downside was “initially thought to be about 75% ‘Twitter noise’ and 25% market demand.”
More recently, Elon Musk has come under fire for his acquisition of social media company Twitter. Tesla investors are increasingly concerned that Elon Musk’s current job as Twitter’s chief executive will distract him from Tesla.
But Evercore ISI also pointed to ways for Tesla to turn the tide. Analysts believe that as long as Tesla introduces a lower-cost Model 2 electric car, it can attract more consumers. The Model 2 is rumored to start at $25,000. However, Elon Musk said that the launch of this electric car will take a long time.
“What we would like to see is a return to the right track… Simply put, the Model 2, out of the 2.7 million Tesla electric car demand, we count 500,000 Model 2s, which of course are not on the market right now. EU et al There is an urgent need for smaller, cheaper models.”
