Tesla (TSLA) shares opened below the late April 2023 low on Thursday, ultimately marking a new 52-week low. The global EV giant was downgraded based on CEO Elon Musk’s decision to prioritize its robotaxi program over its cheaper next-generation vehicle.
X
Deutsche Bank analyst Emmanuel Rosner on Thursday downgraded Tesla shares to a hold rating from a buy. Rosner also lowered the company’s price target from 189 to 123, due to the “high probability” that the $25,000 Model 2 would be delayed and the company’s strategic priority would change to robotaxi.
Rosner wrote that the previous Buy rating was based on Tesla’s next-generation car priced at $25,000 due in late 2025, which would allow the company to reaccelerate volume, margins and free cash flow.
However, it now appears that Tesla’s future is tied to “cracking the code for full driverless autonomy,” which Rosner says poses a “significant technological, regulatory and operational challenge.”
The analyst added that the shift in focus to the robotaxi “changes the thesis” and that it could undergo a “potentially painful transition in ownership base” with EV investors “throwing in the towel” and “eventually being replaced by AI/ tech investors with significantly longer time horizons.”
Tesla stock fell 2.6% to 151.39 during Thursday’s market action, hitting a new 52-week low. On Wednesday, TSLA fell 1% to 155.45. Shares of Tesla fell 2.7% to 157.11 on Tuesday, hitting a 2024 low of 153.75 intraday on Tuesday. The move undermined the March 14 low of 160.51.
Meanwhile, Cathie Wood and her Ark Invest funds bought 20,683 shares of Tesla on Tuesday and 66,504 TSLA shares on Wednesday, according to daily trading information. Wood boosted Ark’s Tesla stock in 2024. Cathie Wood has long been optimistic about Tesla’s autonomy push and robotaxi.
Tesla stock performance
TSLA shares rose 3.7% to 171.05 last week, buoyed by Elon Musk’s promise of unveiling a robotaxi on August 8. The week before, Tesla stock fell 6.2% and Cathie Wood bought almost 453,000 shares.
TSLA stock is trading below its 50-day moving average, after falling about 13% in March.
Tesla stock has plummeted in 2024, but at least it’s cheaper, right? No
Meanwhile, analysts and investors await news on Musk’s strategy regarding the robotaxi and next-generation vehicle during the upcoming Q1 earnings call next Tuesday.
Analysts expect first-quarter earnings to fall about 42% to 49 cents per share, while revenue will fall 4.5% to $22.27 billion. If Tesla’s first-quarter earnings per share come in as expected, it would be the lowest quarterly level since the EV giant traded at 48 cents per share in the second quarter of 2021.
Tesla reported in early April that a total of 386,810 vehicles were delivered worldwide in the first quarter, while the company produced 433,371 vehicles. Deliveries total 369,783 Model 3 and Model Y units, along with 17,027 “other” vehicles. Tesla’s first-quarter deliveries of 386,810 undercut even the lowest estimates and mark the lowest quarterly deliveries since 344,000 in the second quarter of 2022.
The EV giant blamed the first quarter performance on issues with production ramp-up of the updated Model 3 and factory closures.
The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a Composite Rating of 32 out of a best value of 99. Tesla stock also has a Relative Strength Rating of 10 and an EPS Rating of 67.
Follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla stock a buy or a sell?
Get full access to IBD stock lists and ratings
Want to learn how to pick great stocks? Read Investors Corner
Is Rivian a buy now after it launched its new product line?
Chip stocks lead latest sell-off with key gains
