Wall Street analysts have become increasingly bearish on Tesla Inc. as concerns over sales and price cuts weigh on the electric vehicle maker. Wells Fargo analyst Colin Langan recently downgraded Tesla stock to a sell equivalent, citing risks to sales volumes and the effectiveness of recent price cuts.
Langan expects Tesla to see flat sales volumes this year, with a decline projected for 2025. He described Tesla as a “growth company with no growth,” noting that sales volumes only increased by 3% in the second half of 2023 while prices fell by 5%. This has led to a decrease in bullish ratings for Tesla, with levels at their lowest since April 2021.
The company’s growth outlook for the year is lower, and other industry players are also cautious about near-term demand for electric vehicles. Tesla’s stock has fallen by 29% this year, causing it to drop off the list of the 10 biggest companies on the S&P 500.
Despite these challenges, Tesla still trades at a significantly high valuation, with the stock priced at 55 times forward earnings. However, some analysts remain optimistic about the company’s future. Wedbush analyst Dan Ives urges investors not to give up on Tesla, as he believes growth and margin improvement will return in the coming quarters.
As Tesla faces increased scrutiny from Wall Street, investors will be closely watching how the company navigates these challenges and whether it can deliver on its growth potential in the future.
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