By Senad Karaahmetovic
A senior analyst at Wedbush slashed the price target on Tesla (NASDAQ:TSLA) stock to $175 per share from the prior $250 on the worsening outlook for the electric vehicle (EV) maker.
He highlights higher inventory levels, recent price cuts, and overall production slowdowns in China as drivers of a likely Q4 miss. Moreover, Tesla seems to be on a “softer trajectory for 2023.”
The lowered price target reflects slashed delivery estimates with the analyst now calling for the EV producer to deliver 410K-415K vehicles, down from the prior 450K estimate and below Street’s consensus of around 435K.
“The reality is that after a Cinderella story demand environment since 2018 Tesla is facing some serious macro and company specific EV competitive headwinds into 2023 that are starting to emerge both in the US and China,” the Wedbush analyst said in a client note.
The analyst, a long-time Tesla bull, also blasted CEO Elon Musk, saying Tesla needs “a leader at this time,” not “Ted Striker.” He believes that a 70% drop in Tesla stock from record highs was mostly “Musk/Twitter driven with the rest around demand worries in this macro.”
“At the same time that Tesla is cutting prices and inventory is starting to build globally in face of a likely global recession, Musk is viewed as "asleep at the wheel" from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm,” he also wrote.
Still, he reiterated an Outperform rating and could see Tesla stock bottoming near current levels “if Musk refocuses back on Tesla, truly stops selling stock (walk the walk, not just talk the talk), the Board initiates a buyback, and 2023 guidance is set conservative on its 4Q call in January.”
“The long term Tesla transformational story remains intact in our opinion as the EV demand globally is set to meaningful accelerate over the coming years with Tesla the clear leader poised to benefit front and center,” the analyst concluded.
Speaking in Twitter Spaces yesterday, Musk committed not to sell more Tesla stock “until I don't know probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter."
"I needed to sell some stock to make sure, like, there's powder dry...to account for a worst-case scenario," he told listeners.
Tesla stock jumped over 3% in after-hours Thursday on his comments before paring back some gains to now trade about 1% higher in pre-open Friday.