A growing chorus of Wall Streeters covering Tesla’s stock are becoming more cautious on the name heading into 2023, adding to a brutal month and year.
EvercoreISI analyst Chris McNally slashed his price target on Tesla’s stock to $200 from $300 on Tuesday, joining bearish takes in the past week from Goldman Sachs, Wedbush, and Oppenheimer.
“While we continue to view Tesla as having a leading EV gross margin advantage from global scale, vertical integration, and US IRA [Inflation Reduction Act] benefits, it is impossible to ignore that investors are already well aware of these benefits but now must ALSO battle test demand assumptions for 2023-2025,” McNally said in a new note to clients.
Tesla shares fell more than 2% in early trading Tuesday.
Added McNally: “While a positive revision cycle may not be done forever (IRA a powerful unit/margin amplifier), it’s hard to ignore the prevailing Tesla thesis drift from 1) Unlimited demand/Rev to 2) Margin ‘story,’ that has occurred over the last 6-12 months.”
McNally’s take comes after a frenzied day for Tesla investors.
Shares of the EV maker opened up on Monday amid hopes CEO Elon Musk would step down from the same post at Twitter.
“Should I step down as head of Twitter? I will abide by the results of this poll,” Musk tweeted to his 122.1 million followers on Sunday.
The poll closed on Monday morning, with 57.5% of the 17.5 million votes choosing “Yes.”
Musk hasn’t disclosed whether he would in fact step down.
Shares of Tesla finished Monday’s session down slightly, mirroring the broader market.
“You need a CEO of Twitter that’s not Musk,” Ives said on Yahoo Finance Live on Friday. “This is what I’d say is an untenable situation in terms of him being CEO of Twitter and Tesla.”
Shares of the EV maker are down about 63% from a peak last November — the stock’s largest drawdown since its market debut in 2010 — and down 23% so far this month alone.
Most of the losses for Tesla investors began following Musk’s April offer to buy Twitter, a deal that closed in in late October.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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