Analyst Coverage Changes
On January 13th, 2023, Guggenheim Securities downgraded Tesla Inc. to a “Sell” rating. This means that the firm believes that the stock will perform worse in the future than they previously thought, and they are suggesting to their clients to sell the stock.
Citigroup, on the other hand, maintained a “Neutral” rating for Tesla Inc. This means that the firm believes that the stock’s performance will remain similar to what it is currently and they don’t have a strong buy or sell recommendation. However, Citigroup also lowered their target price for the stock from $170 to $140, which is the price at which they believe the stock will reach in the future.
Wells Fargo also maintained an “Equal Weight” rating for Tesla Inc. This means that the firm believes that the stock will perform similarly to the overall market. However, like Citigroup, Wells Fargo also lowered their target price for the stock from $220 to $130.
Tesla Stock Forecast and Analysis
According to the stock forecasts from 35 analysts, the average target price for Tesla Inc. for the next 12 months is USD 261.82. This means that on average, the analysts believe that the stock price will reach this level within the next year. The average analyst rating for Tesla Inc. is “Buy”, which means that on average, the analysts recommend buying the stock.
Stock Target Advisor, has its own analysis of Tesla Inc. and they have classified it as “Slightly Bullish”. This means that their analysis indicates that the stock has more positive signals than negative signals. Specifically, they have identified 10 positive signals and 6 negative signals.
At the last closing, Tesla Inc.’s stock price was USD 123.56. In the past week, the stock price has increased by +11.98%, over the past month it has decreased by -26.37% and over the last year, it has decreased by -66.49%.
Tesla Reduces Prices
Recently, it has been reported that Tesla’s inventory has been piling up, and as a result, analysts and investors predicted that the company would reduce its prices. And it seems that their predictions were right. In addition to lowering prices for the Model 3 and Model Y in a number of countries in Europe, Tesla has significantly reduced prices for these models in the United States. This move was likely done in the name of boosting demand and bringing these automobiles under the price caps for the Electric Vehicle (EV) Tax Credit provided by the Inflation Reduction Act.
According to Dan Ives, an analyst at Wedbush, the price reductions are “the right medicine at the right time.” Ives argued that lowering prices was the appropriate strategic move given the possibility that demand is decreasing and the level of competition is increasing.
The Rear-Wheel-Drive (RWD) version of the Model 3 now costs $43,990, which is a drop of 6.4% from the previous price of $46,990. Even more significant, the price of the Model 3 Performance has dropped from $62,990 to $53,990, representing a price reduction of 14.3%. It’s worth noting that the maximum price for qualifying vehicles for the IRA tax credit is $55,000 for vehicles such as the Model 3.
Price reductions that are even more significant have been implemented for the well-liked Model Y SUV. A reduction of nearly 20 percent brings the price of the Model Y Long Range down to $52,990 from $65,990. There is a reduction of almost 19% in the price of the Model Y Performance, which goes from $69,900 to $56,990. It’s worth noting that the maximum price for the Model Y in its 5-seat configuration is the same $55,000. The price of the Model Y with seven seats, which had previously been eligible for the price cap on electric vehicles of $80,000, has now increased by $1,000.
Despite the fact that these prices are likely to significantly increase sales in the first quarter and bring customers who had previously purchased EVs from other brands back to Tesla, analysts believe relevant concerns still remain about the company’s future sales figures among severe macroeconomic pressures.
About Tesla
Tesla, Inc. is an American multinational corporation that specializes in electric vehicles, energy storage and solar panel manufacturing based on lithium-ion battery energy. The company was founded in 2003, and it designs, develops, manufactures, and sells electric vehicles, electric vehicle powertrain components, and energy storage systems. Tesla is also involved in the sales of renewable energy products and services, and it operates through three segments: Automotive, Energy Generation and Storage, and Services. The company is led by CEO Elon Musk, who is also the CEO of SpaceX, Neuralink, and The Boring Company. Tesla is known for its mission to accelerate the world’s transition to sustainable energy and to help reduce dependence on fossil fuels.
