As experts and investors began to voice concerns about how many cars the electric vehicle manufacturer will claim to have sold over the previous few months, shares of Tesla Inc. dipped Monday.
First-quarter delivery expectations have been declining as a result of growing public outrage over CEO Elon Musk’s involvement in the Trump administration and concerns about the effect of tariffs on imported auto parts. The first-quarter deliveries are scheduled to be announced on Wednesday.
The stock (TSLA) fell 1.7%, reversing a 7.7% intraday fall earlier. The drop follows last week’s 6% rise, which ended a record nine-week losing skid and marked the stock’s first weekly gain since the inauguration.
Stephen Gengaro, a Stifel analyst, reduced his first-quarter delivery projection by 23% on Monday, from 458,672 to 353,418 EVs. He attributed his pessimistic perspective to the protests against CEO Musk and the timing of the new Model Y’s manufacturing ramp-up.
He said that some customers might put off buying because of the much-anticipated release of a less expensive variant by the end of June.
Gengaro maintained his buy recommendation for the stock in spite of the reduced delivery view. Even though he reduced his target stock price by 4%, from $474 to $455, the new objective still indicates a 78% increase from the present levels.
As lower-priced car sales and complete self-driving in Austin, Texas, take effect later this year, Gengaro wrote in a note to clients, “We expect share price volatility to persist in the near term,” but he added that he is still “optimistic” about the medium and long term.
The most recent bullish analyst to significantly lower their delivery estimate is Gengaro. Ben Kallo of Baird reduced his prediction earlier this month from 369,400 to 315,400.
Even the biggest bull on Wall Street, Dan Ives of Wedbush, stated last week that he anticipates a “very soft” delivery total, which may fall between 355,000 and 360,000. According to Ives, Tesla will still be harmed and compelled to hike prices because many of the parts used to create its EVs are imported, even though the company should be mostly immune from tariffs because all of its EVs are assembled in the United States.
Investors have been far more concerned than Wall Street’s sell-side experts, despite the downgraded prognosis.
The stock has dropped 36.9% so far this year, including 13% in March. In contrast, the SPX of the S&P 500 index has declined 5.6% this year and 6.7% this month.
In the meantime, FactSet’s average analyst-compiled first-quarter delivery projection has only decreased by 7.1% this month to 408,000 units. At the end of last year, that “consensus” estimate was just 13% lower than what was anticipated.
Analysts currently have an average price target of $358.25, which is a 40.5% increase from current levels. That aim is 21% higher than it was three months ago, despite being 0.6% lower than it was a month ago.
The number of bullish analysts has also increased as a result of the disparity in the level of investor and analyst concerns. Compared to 27 at the end of March and 26 at the end of 2024, 29 (51%) of the 57 analysts FactSet polled who cover Tesla are bullish.
One of those analysts who turned optimistic earlier this month was Andres Sheppard of Cantor Fitzgerald. As long as they can tolerate some short-term volatility, he said, longer-term investors should begin purchasing now that the stock has dropped sufficiently.
