Tesla Inc. (NASDAQ: TSLA), shares are now priced to perfection after a 100 percent increase in the last three months.
This EV stock, which is currently trading for a huge premium over the entire industry, could be impacted by a slight setback.
Wells Fargo’s Colin Langan believes that Tesla could crash to $125.
Langan doesn’t expect his company to rely on its robotaxis in 2025.
Tesla’s stock could crash due to a minor setback
Tesla risks losing its margins to Chinese competitors, such as BYD or NIO. These rivals continue to gain market share in China and on international markets.
Consumers around the world are attracted to their high-quality, competitively priced products.
Investors will punish Tesla’s shares if it misses earnings expectations, or even if they take a conservative view of the future at its January 29 report.
Tesla announced earlier this month that it had delivered 495 570 vehicles during its fourth quarter, bringing the total for 2017 to 1,789 226. This marked its first ever annual decrease in deliveries. In 2023, the EV company sold 1.81 million cars.
Cybercab, Optimus and other projects have been overvalued
Wells Fargo’s contrarian rating of “underweight”, which is a negative, was maintained on Tesla stock today. It cited the persistently weak fundamentals.
Investment firm is still very bearish about TSLA, as its price reductions have failed to increase deliveries despite the increasing competition of electric car manufacturers based in China.
EVs from the company will also become 12% more costly if Donald Trump decides to rescind portions of the Inflation Reduction Act upon taking office January 20 th. Colin Langan, a client on Wednesday, said that despite the razzle dazzle of 2024 these concerns still remain.
Langan believes that Tesla will be the most affected if the EV tax credit is removed by the new government. He cites a decline of 41% in its sales when Germany stopped subsidizing electric cars in 2023.
Wells Fargo sees Cybercab, Optimus and other projects of the company as being overvalued. They also perceive material risks to their value. In a recent research note, Wells Fargo argued that Cybercab’s risk was greater than its reward due to the possibility of setbacks in regulation and safety. This could damage the company’s credibility.
Tesla Inc. is forecast to earn 64 cents per share for its fourth fiscal quarter. Last year it earned 57 cents per share. The EV manufacturer debuted the new Model Y in China last week.
The post Tesla Stock Priced for Perfection: Analyst Sees 70% Slide Ahead may be updated as new information unfolds
