Elon Musk.Carina Johansen/Getty Images
According to a Tuesday note, Evercore ISI has lowered its target price for Tesla stock to $200 instead of $300. According to Evercore ISI, the firm stated that it would like Tesla to launch a Model 2 which is intended as a cheaper EV. Tesla stock plunged more than 60% since its November 2021 peak.
Evercore ISI reduced its target price of Tesla stock to $17 on Tuesday due to declining market share in Europe, China and demand.
Analysts have reduced their target to $200 from $300. However, this still represents approximately 40% upside over current levels.
They wrote that Tesla still enjoys a significant EV gross margin advantage due to global scale, vertical integration and the benefits of the US Inflation Reduction Act. However, it was impossible to ignore that investors already know these benefits, but must ALSO fight to test demand assumptions for 23-25.”
Tesla stock has come under tremendous pressure this year while Elon Musk, Chief Executive continues to sell shares.
The stock plunged over 60% from its November 2021 peak and fell 5% Tuesday, to $142. Evercore noted that shares lost support at key technical level $150-163
The note stated that China’s slow growth is still a problem, but that investors are now reexamining their demand assumptions. Analysts said that although Musk’s acquisition and the faltering of the Chinese electric vehicle manufacturer are the main challenges facing Tesla stock, there are other factors now impacting the stock. Headwinds were originally pegged at 75% “TWTR noise” and 25% China/other. However, the “other” has become louder.
Tesla investors have expressed concern that Musk’s acquisition of Twitter by Elon Musk has drawn criticism. They are concerned that Musk’s current focus on Twitter may be being lost to his role as chief executive at Twitter.
Evercore sees a way to help Tesla fight back. He points to the Model 2, which will offer a lower price and appeal to a wider range of customers. Although the lowest-range model is expected to cost $25,000, Musk has said that it is not yet on the market.
“What we want is to fix the ship,” analysts wrote. Analysts wrote that China and the EU urgently need a smaller, more affordable model.
Business Insider has the original article.
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By: bevans@insider.com (Brian Evans)
Title: Tesla stock price target cut by a third as Model 2 is needed to ‘right the ship,’ analyst says
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-outlook-price-target-cut-200-model-2-evercore-2022-12
Published Date: Tue, 20 Dec 2022 17:37:44 +0000
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