Tesla Faces Tough Road Ahead, Analyst Predicts Lower Earnings Citing Market and Production Hurdles
Portfolio Pulse from Anusuya Lahiri
Bernstein analyst Toni Sacconaghi downgraded Tesla Inc (TSLA) with an Underperform rating and reduced the price target from $150 to $120, citing bearish sentiment, weakened demand in Europe and China, decelerated EV adoption, and production delays. The analyst lowered production and delivery estimates, as well as the GAAP EPS forecast, indicating challenges in ramping up the Highland Model 3 production and a need for a refresh to boost demand. Despite Tesla's valuation remaining high compared to traditional auto manufacturers and large-cap tech companies, concerns about its premium pricing and sustainability of its high valuation were raised. Tesla's stock has declined 31% year-to-date, but it traded higher by 4.29% at $180.10 recently. Exposure to Tesla's stock can also be gained through Tidal ETF Trust II The Meet Kevin Pricing Power ETF (PP) and Vanguard Consumer Discretion ETF (VCR).
March 26, 2024 | 5:04 pm
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NEGATIVE IMPACT
Tidal ETF Trust II The Meet Kevin Pricing Power ETF (PP) offers exposure to Tesla's stock, which has been downgraded and faced a price target reduction.
Given PP ETF's exposure to Tesla, the negative news surrounding Tesla's downgrade and price target reduction could potentially impact the ETF's performance in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Tesla Inc downgraded to Underperform with a price target cut from $150 to $120 by Bernstein analyst Toni Sacconaghi, citing bearish sentiment, weakened demand, and production delays.
The downgrade and price target reduction by a prominent analyst based on bearish sentiment, demand concerns, and production delays are likely to negatively impact investor confidence and Tesla's stock price in the short term.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
NEGATIVE IMPACT
Vanguard Consumer Discretion ETF (VCR) provides exposure to Tesla, which has recently been downgraded with a lowered price target.
As VCR ETF includes Tesla in its holdings, the downgrade and price target cut for Tesla could negatively affect the ETF's short-term performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50