The sell-off of Tesla (NASDAQ:TSLA) Inc. (NASDAQ:TSLA) continues and no end is in sight. More negative news could come in the future, according to Wedbush analyst Daniel Ives.
The analyst on Tesla Ives maintained his Outperform rating for Tesla stock, but lowered the price target from $250 to $175.
The thesis on Tesla Tesla is likely to miss Wall Street’s reduced estimates for the fourth quarter, Ives said, citing higher inventory levels, recent price reductions and the overall slowdown in production in China.
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The analyst cut its fourth-quarter delivery estimates from 450,000 units to a range of 410,000-415,000 units, below analysts’ estimates of 435,000 units. After the “Cinderella demand story environment” since 2018, Tesla faces serious macroeconomic and company-specific competitive hurdles in 2023, he noted.
Ives also lowered its estimates for the fourth quarter and 2023 on the forecast of a more subdued demand trajectory.
“Musk looks like he’s ‘fallen asleep at the wheel’ from a leadership perspective for Tesla, at a time when investors need a CEO to navigate this Category 5 storm.”
Instead, the billionaire is focused on Twitter, a nightmare that never ends for investors, Ives said. Investors expect a new CEO to be elected in the coming weeks as a step forward, Ives added.
Musk’s stock sales (even though he claims they’re over), his political storm on Twitter and the deterioration of the Musk and Tesla brand have turned out to be a complete debacle for the stock, the analyst said.
Looking ahead to 2023, despite the Musk/Twitter circus and more subdued demand trends, Tesla still has the potential to post $5-6 profits, as well as the ability to achieve delivery growth of more than 40% in a brutal environment, Ives said. With long-term demand for electric vehicles likely to accelerate significantly over the next few years, Tesla’s transformation story remains intact, he added.
“We believe that if Musk refocuses on Tesla, stops selling shares for real (he starts acting and doesn’t just talk), the Board initiates a buyback and the forecasts for 2023 are set as conservative on his Q4 earnings call in January, then this stock has bottomed out in our opinion and we’ll see how it moves forward from here.” Wedbush declared.
The movement of prices Tesla closed Thursday’s session down 8.88% at $125.35, according to data from Benzinga Pro.