Tesla (NASDAQ:TSLA) is currently facing challenging times both in the stock market and in the real world. The company’s shares have experienced a significant 34% decline so far this year, reflecting concerns about waning demand and increased competition in the electric vehicle (EV) market. Recent events, including supply disruptions and production challenges, have further exacerbated Tesla’s woes.
Deutsche Bank analyst Emmanuel Rosner highlighted several issues impacting Tesla’s performance, including unexpected challenges in production volume and costs during the first quarter. Supply disruptions related to the Red Sea conflict and an arson attack near Tesla’s Berlin factory led to shutdowns, affecting the production ramp-up of various models, including the Model 3 Highland and Cybertruck/4680 in Austin.
While Tesla acknowledged a slowdown in the EV market, it attributed part of it to misconceptions surrounding EVs and the company itself. In response, Tesla plans to increase spending on advertising and marketing to address concerns such as EV “range anxiety” and emphasize the affordability of its vehicles. However, the company anticipates an “intermediary lower-growth period” for 2024 as its Model 3/Y models reach maturity, with next-generation vehicles not expected to launch until late 2025.
Rosner expressed short-term concerns about Tesla’s outlook, particularly regarding demand, pricing, and earnings. However, he believes investors should focus on the longer-term prospects of the company, especially regarding its highly anticipated next-generation platform. As Tesla executes efficiency initiatives in the next-gen platform, it could strengthen its competitive position and maintain its leadership in the electrification space for years to come. Despite near-term challenges, Rosner remains optimistic about Tesla’s long-term trajectory.
Deutsche Bank analyst Emmanuel Rosner maintains a Buy rating on Tesla shares, with a price target of $218. This target suggests a potential upside of 33% over the next 12 months. While Rosner’s bullish outlook reflects optimism about Tesla’s long-term prospects, the broader sentiment on Wall Street is more cautious. The consensus among analysts, based on a combination of 18 Hold ratings, 10 Buy ratings, and 6 Sell ratings, is to Hold the stock. However, despite the mixed sentiment, analysts still anticipate decent gains, with the average price target of $207.74 implying a 27% potential upside over the next year. Investors should consider these diverging views and conduct their own research before making investment decisions.