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Tesla (TSLA) shares pop, despite some of its recent declines and analyst cuts — most recently, Evercore ISI cutting its delivery estimates and lowering its price target for the stock. Brad Smith and Madison Mills examine Tesla's price action.
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Tesla shares moving higher in pre-market trading. That comes despite a second analyst lowering delivery estimates for the automaker in a note out today. You've got Evercore ISI lowering its price target for Tesla and their full-year estimate for vehicle deliveries. This also follows UBS lowering their full-year deliveries target as well. Both anticipating Tesla delivering fewer vehicles in the current year than they did last year so far. Tesla is the worst performing stock in the S&P 500 year to date. And you can see here on your screen the estimates for Tesla deliveries from Evercore and from UBS compared with last year. Just a slight dip compared with 2024, but still a dip nonetheless. And I think this comes amid a couple of headwinds that we've been talking about for Tesla, right? Obviously, you've got the political leanings of Elon Musk weighing on sales in Europe. We've also got Chinese buyers switching to domestic brands amid a broader push amongst Chinese consumers to be going with China homegrown names, the likes of BYD, for example. And then you also have challenges with what they're offering, with the lack of diversified products moving forward. They haven't been offering up as much diversification as some analysts have wanted to see, and that's something else that has been a sticking point for the company. And I keep having these conversations with bullish analysts, and I keep asking them, look, if people don't want to buy Teslas, how is that not bad for Tesla's business moving forward? But the stock has performed so well. It seems like people are having trouble looking at that question.
Yeah, and Morgan Stanley, I think that is exactly where you see still some of that bullish spirit that has continued to reign through their, at least analysts here. They believe that there's still a position that is a that the stock is overweight right now, as of earlier this week here. And they did acknowledge within that, which was interesting, the stock down, of course, this week, even further as we've been watching. The stock down 50% as of their time of writing. Their investor conversations are focused on management distraction, brand degradation, and lost auto sales. All three pillars to the downgrades that we have seen. However, it's Morgan Stanley that's saying the delivery data, even though it's been below expectations this year driven by competition, they're believing that there is still more of the opportunity and catalysts around the number of events they're paying attention to, Austin Robo Taxi unveil. Uh, they're looking for some milestones around federal rulemaking for autonomous vehicle technologies. But that's a lot of things to have to get right in order for Tesla to prevail within this story right now, which has a lot of looming clouds over top of it.
A lot of uncertainty seems to be the thing.