Tesla drops below $700 as bulls reset expectations
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Wedbush Securities lowered its 12-month price target on Tesla (NASDAQ:TSLA) to $1,000 from $1,400 as it acknowledged that the current headwinds are too hard to ignore.
Analyst Dan Ives said the reality is that the current Shanghai lockdowns have been an epic disaster so far in the second quarter and Tesla (TSLA) is expected to see modest delivery softness with a slower growth trajectory in the key China region right in front of the second half of the year. The Wedbush forecast for Q2 deliveries was lowered to 277K from 297K.
Ives and team kept an Outperform rating on Tesla (TSLA), but lowered earnings estimates for Q2, FY22 and FY23 to reflect softness in China.
"We remain firmly bullish on Tesla over the long-term and our thesis has not changed, however we have to reflect a new reality for Tesla in China with headwinds abound in a shakier macro backdrop. Finally, the Twitter circus show has been a black eye for Musk and Tesla's stock in our opinion and has turned into a life of its own which has cast a dark shadow on the name and caused many investors to exit stage left while this soap opera continues."
Shares of Tesla (TSLA) fell 1.99% premarket to $695.72 after shedding 6.80% on Wednesday. TSLA is down more than 40% YTD vs. -18% for the S&P 500 Index.