Shares of the electric vehicle company Tesla (TSLA) decreased by 3.4% as of 12:18 a.m. ET. This decline occurred amid broader market struggles caused by inflation rates exceeding expectations, compounded by an analyst lowering their price target for the stock.
The Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index, increased by 0.4% month over month and 2.8% year over year, surpassing forecasts and sparking additional inflationary concerns, which contributed to a decline in most stocks.
In a report issued on Friday morning, Deutsche Bank analyst Edison Yu maintained his buy rating for Tesla but reduced his price target from $420 to $355. Yu also adjusted his first-quarter delivery estimates for the company, reducing them from 378,000 to between 340,000 and 350,000 vehicles. This would represent an 11% year-over-year drop in deliveries, marking the lowest delivery figure since 2022.
Yu now anticipates Tesla’s full-year deliveries will total 1.7 million, reflecting a 5% year-over-year reduction. He attributes the decrease to weakness in European markets and the Model Y Juniper transition. Despite the data indicating a potentially weak quarter for deliveries, several analysts remain optimistic about Tesla due to its anticipated launch of robotaxis and household robots. Yu noted, however, that developments at Tesla rarely proceed in a straight line, adding that progress in robotaxi and humanoid technology might not be linear.
Attention is focused on the first-quarter earnings report due in late April, which will reveal how deliveries have trended and could significantly impact Tesla’s stock. Currently, some analysts remain cautious about investing in Tesla due to its trading at approximately 100 times its forward earnings, viewing this as an unfavorable risk-reward balance.
