Tesla Shares Jump 12% on Musk's Affordable Car Promise, Yet Wall Street Cuts Target Prices Amid Skepticism
Despite reporting a lackluster first quarter on Tuesday, featuring a 9% revenue decline and a 48% fall in adjusted net income, Tesla announced plans to accelerate the production of a "more affordable vehicle," potentially launching it late this year or early 2025. Following the earnings call and the promise of a more accessible car, Tesla's shares soared by over 12%, buoying investor sentiment.
However, Wall Street seems skeptical of Elon Musk's assurances. Following Tesla's earnings announcement, nine major banks, including prominent institutions like RBC, Wedbush, UBS, and HSBC, revised the company's target price, with six of them reducing their projections for Tesla's stock price.
UBS analysts cut their price target for Tesla from $160 to $147 per share, maintaining a Neutral rating on the stock. The bank said, "1Q24 auto GM ex-credits at 16.4% was much better than expected, aided by lower raw materials and Full Self-Driving (FSD) recognition.”
UBS acknowledges Tesla's progress in autonomous driving technology but remains cautious about the near-term viability of full autonomy. "In our view, this conversation will get somewhat tabled until 8/8 robo-taxi day.”
JPMorgan predicts that Tesla may face further negative earnings revisions and a decline in valuation multiples after the Q1 results came in weaker than expected. The bank believes that, as investors start to factor in the implications of the company's near-term expectations reset for long-term growth, Tesla's current valuation is still too high to sustain in the long run. As such, JPMorgan maintains its Underweight rating on Tesla and has set a price target of $115.
RBC Capital analyst Tom Narayan lowered the firm's price target on Tesla to $293 from $294 but keeps an Outperform rating on the shares.
Narayan notes that Tesla's Q1 Auto Gross Profit margins exceeded expectations due to improved cost controls. Additionally, RBC highlights that Tesla's latest FSD V.12 has been a significant upgrade from previous versions and has accelerated the company's development plans for robotaxis. The analyst describes the upgrade as "seismic," and notes that it builds on an already revolutionary product.
However, some investment banks are bullish on Tesla. Bank of America upgraded Tesla's stock from "Neutral" to "Buy" and reiterated its $220 price target following the release of the company's earnings report.
John Murphy from the bank sees positive catalysts emerging and believes Tesla has cleared out the bad news. If the company follows through with its development plans, it expects that the stock price will see significant gains. Bank of America sees negative catalysts "knocked out" with the Q1 report and positive catalysts building through the rest of the year.
''Admittedly, the combination of all of these may not structurally change the long-term path of the company, but in the near-term, the tide in news flow appears to suggest the risk to the stock is skewing more positively,'' Murphy said.
Check out Wall Street banks' latest target prices for Tesla:
Mooers, what do you think will be the next trend of Tesla's stock price?
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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joe black8 : Elon sounds like Enron, but most smart ppl are realizing what fool this guy is
Aivern : when was the last time elon met a deadline? lol this is just bs to hype his simps
MAX MOSHIRI : Elon pumping while dumping.
how else is he going to earn
$56,000,000,000.00
I really like his presentation on Robo Taxi!!!
ChristWithinU : I am torn in what Tesla will do in price actions. I had taken out a call option for 170.00 that now expires next Friday. I believed it would rise but then earnings hit with negative data. I expected it to crush me into the 130s then yet it rose to 166+ and had me excited I may make my target until it suddenly "stopped". While it has a downward trending pattern, I still hold out hope for my price to hit. God willing it will make one last push to 175 before next Friday for me but the realist in me says I am taking a big loss next Friday as it lost the momentum it had going upward. I may buy a put to counter the call loss
73754291 : Elon I trust
Ken Chin 6404 : Tsla Rising to the Moon…