Even some of Tesla’s biggest bulls have turned bearish
By Chris Isidore, CNN
(CNN) — These are nervous times for Tesla bulls on Wall Street. They now believe the future ain’t what it used to be, to paraphrase noted market analyst Yogi Berra.
In recent weeks, even some of Tesla’s biggest analyst fans are changing course. They’re cutting their lofty 12-month price targets and sounding alarm bells about the backlash against polarizing CEO Elon Musk — and the damage he has caused the Tesla brand since becoming such a high profile member of Team Trump.
Late last month analysts at Deutsche Bank, RBC Capital Markets, Stifel Nicolas and Piper Sandler cut their price targets for Tesla.
Then, on Sunday, came a shocker from one of Tesla’s most prominent optimists: Dan Ives of Wedbush Securities slashed his 12-month price target by 43% to $315.
The move sent (TSLA) shares down more than 7% to as low as $222.24 in early trading, amid a volatile morning for stocks broadly — before making up some of those early losses in the early afternoon to close 2.6% lower. The slide follows a drop of more than 5% in Thursday and more than 10% on Friday.
Ives still has an “overweight,” or buy, recommendation for Tesla as he believes the company still has strengths in the long term. But with protests continuing outside Tesla showrooms and falling sales around the globe, he said it’s critical for Tesla’s future that Musk step back from the Trump administration before it’s too late to repair the damage.
Investors seem to agree. Even after Tesla reported its biggest drop in quarterly sales in company history on Wednesday, shares closed higher after Politico reported the same day that Musk was preparing to step back from his role in the near term. But White House officials and Musk dismissed the claim, with the CEO calling it “fake news.”
Those denials may have hurt Tesla stock, as have growing recession fears tied to the Trump administration’s tariff plans — even though Tesla is less exposed to US tariffs than other automakers.
Tesla’s post-election rollercoaster
Tesla shares nearly doubled in value between Election Day and an all-time peak on December 17, as many investors believed Musk’s close ties to Trump would help the brand. But since that point, as it became more apparent that Musk would play a central role in some the administration’s more controversial moves, they have lost about all those gains.
Members of the administration have taken extreme measures to try to help Musk. Trump announced he would buy a Tesla himself and held an event at the White House to pitch the cars. Then on March 19 Commerce Secretary and former Wall Street executive Howard Lutnick on Fox News that viewers should “buy Tesla” and that the stock “will never be this cheap again.”
Experts said those comments may have violated government ethics rules. Meanwhile, the recent stock slide means Tesla shares are indeed already below that point.
Global backlash a ‘very bad thing’ for Tesla
Ives wrote in his Sunday note that while he still sees an upside for Tesla shares in the long-term, Musk’s political role has done severe brand damage in the near-term.
That’s the case not only in America but also in Europe and China, Ives said. China is the world’s largest market for electric vehicles, and it’s also Tesla’s second largest market behind the United States with nearly $21 billion in 2024 sales.
Ives called China “the linchpin to the future success of Tesla.” He warned “the backlash from Trump tariff policies in China and Musk’s association will be hard to understate,” which “will further drive Chinese consumers to buy domestic.” He estimates the company has lost 10% of its future global customer base, which he said could be a conservative prediction.
Tesla has “essentially become a political symbol globally… and that is a very bad thing for the future of this disruptive tech stalwart,” he said.
Like Ives, the analysts at Deutsche Bank, Stifel Nicolas, Piper Sandler and RBC Capital Markets still have a buy recommendation on Tesla despite their near-term misgivings. All still have 12-month targets above the current stock price.
But there are prominent Wall Street analysts — including those at JPMorgan Chase and Wells Fargo — telling investors to sell their Tesla shares. Both predicted that Tesla stock will lose more than 40% of its value from where it closed on Friday over the course of the next year.
“Tesla’s first quarter sales and production report causes us to think that — if anything — we may have underestimated the degree of consumer reaction,” JPMorgan Chase analyst Ryan Brinkman wrote in a note to clients Friday. “What does seem clear, however, is that the trend in Tesla sales is worse than we and the market had appreciated.”
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