By Michael Elkins
Wedbush reiterated an Outperform rating and $175.00 price target on Tesla (NASDAQ:TSLA) after the electric vehicle giant saw a major sell-off Tuesday as a result of soft 4Q delivery numbers.
Analysts described the sell-off as an “ominous start for the company to kick off 2023 after a horrific 2022”. However, the EV maker’s main worry for now is demand. Especially as China, the largest EV market in the world, is showing heavy cracks and competition is steadily increasing.
With China representing 40%+ of the global growth story for Tesla, analysts believe that heavy concern for the market may lead to more significant price cuts over the coming months to spur demand. This may lead to a potential pricing war to gain market share in a darker macro backdrop.
As his company continues to face headwinds, CEO Elon Musk continues to sell TSLA stock. Even as investor concerns continue to grow.
Analysts wrote in a note, “When does the selling end in Tesla? What is the right valuation for Tesla? What is the normalized growth story into 2023 and beyond? Is Musk asleep at the wheel while focused on Twitter? These are the questions we received over and over yesterday from investors that are hitting their breaking point on the stock/story. Very simply, this is a fork in the road year ahead for Tesla that will either lay the groundwork for its next chapter of growth OR continue its slide from the top of the perch with Musk leading the way downhill.”
Shares of TSLA are up 1.20% in pre-market trading on Wednesday.
Source: investing.com