Tesla Shares Drop as Analysts Adjust Price Target

Tesla Inc. (TSLA) experienced a significant decline of nearly 5% on Monday following a downgrade from analysts at Mizuho, who lowered their price target for the electric vehicle company from $515 to $430. This adjustment led to a closing price of approximately $238 for the stock.

Many investors were left puzzled by the market's negative response to the news, especially considering that the new price target still represents an 80% increase compared to Tesla's current price. Economist Peter Schiff took to social media platform X to question why such news was perceived negatively.

Mizuho’s analysts cited declining demand as a key reason for the price target reduction. They revised their delivery forecasts, projecting 1.8 million vehicles for this year and 2.3 million by 2026, down from earlier expectations of 2.3 million and 2.9 million respectively. Reports indicate that Tesla has underperformed the market across major regions, including the U.S., China, and Europe, last month.

The challenges facing Tesla are compounded by issues such as a deterioration in geopolitical conditions and changing brand perceptions. Notably, CEO Elon Musk's involvement in the Trump administration has led to protests and vandalism directed at Tesla vehicles and showrooms nationwide, as mentioned by Mizuho.

Why It Matters: Investor sentiments are increasingly frayed, as highlighted by Dan Ives, a market analyst from Wedbush Securities, who expressed that impatience among Tesla investors is growing. He pointed out that Musk has not been present at any Tesla manufacturing facilities for a considerable time, which has not gone unnoticed by stockholders.

Adding to the discontent, Tesla investor Ross Gerber shared a video from protests outside a Tesla store in Santa Monica, illustrating a negative shift in community sentiment. In the video, his young child expressed relief that they do not own a Tesla vehicle.

Since reaching a peak price of $479.86 in December, Tesla shares have now halved in value. The consensus price target remains at $318.22 across three analysts, with estimates ranging from $550 to $24.86. The average from latest ratings provided by Canaccord Genuity, Mizuho, and Wells Fargo suggests a potential upside of 36.1% from current levels.

Investors continue to monitor the company’s performance and market conditions, hoping for a recovery amid these challenging times.

Tesla, stocks, market