Analysts Drop Tesla (NASDAQ: TSLA) Outlook and Trim Price Target

Tesla shares have been bouncing a little from the support found near $160, closing the Wednesday session out 1.22% up, and pushing a little higher in the pre-market today to a mark of $180.

It has not been all smooth sailing for TSLA holders in recent times as some of the EV market excitement has faded, and valuations and targets have been adjusted. With TSLA earnings coming on 17th April, there have been some adjustments in deliveries, and analyst comments worth looking at, particularly from the bullish side of the court.

With the imminent release of Tesla, Inc.'s (NASDAQ:TSLA) first-quarter delivery numbers, eyes are on the electric vehicle maker's performance amid grappling with multiple industry challenges. Daniel Ives, a notable analyst from Wedbush, recently reaffirmed his Outperform rating on Tesla but tempered his enthusiasm by reducing the price target from $315 to $300.

Ives pinpointed a cocktail of demand and supply-side issues currently plaguing Tesla. For starters, Tesla's demand in China, a crucial market for the EV giant, appears to be waning—a situation exacerbated by heightened local competition and aggressive pricing from rivals. Factory downtimes and an occurrence such as the Berlin fire have further constricted supply, impacting Tesla's delivery capabilities.

In light of these troubling headwinds, the analyst has scaled back his first-quarter delivery estimates for Tesla, from an optimistic 475,000 units down to a conservative 425,000 units, underscoring the sales crunch Tesla faces. Particularly, the soft demand from China is troubling for Tesla, with Ives estimating a 3-4% year-over-year decrease in deliveries in the region for this quarter.

Other analysts have also released notes in recent days with a similar pattern emerging, one of delivery estimate reductions, and if there are any price target changes, they are moving downward.

Morgan Stanley cut deliveries but retained price target, RBC cuts deliveries and held PT, Citi analyst Itay Michaeli lowers deliveries and trims price target to $196 from $224.

As Tesla grapples with these hurdles, Ives cautioned that the first-quarter deliveries could mark the onset of “darker days,” potentially swaying market sentiment to take a bearish turn on the EV manufacturer. Nonetheless, despite the near-term challenges casting a cloud over Tesla, Ives's long-term convictions remain intact. He especially highlighted Tesla's Full Self-Driving/Autopilot strategy as a beacon of optimism, suggesting a bright future in the looming age of autonomous vehicles.

It is worthy to note that the market hasn't completely turned its back on Tesla. The stock witnessed an encouraging boost, closing up 1.22% at $179.83 on Wednesday. However, this uptick does little to overshadow the broader picture, with Tesla's stock having dwindled nearly 28% since the beginning of the year.

Despite the immediate obstacles, Ives remains bullish on Tesla's prospects over the coming years. He champions the belief that Tesla will continue to dominate the electric vehicle landscape, fortified by its advancements in Full Self-Driving/AI software technology.

Navigating through these tempestuous times is seen as a pivotal moment for Tesla and its CEO Elon Musk. The way in which they steer through this period could very well determine the company's trajectory in the fiercely competitive world of electric vehicles.