Guggenheim Says “Sell” Tesla as Fundamentals Deteriorate but Jim Cramer Says No

Guggenheim analyst Ronald Jewsikow reiterated his “Sell” rating on Tesla (TSLA) stock, while Jim Cramer finds a silver lining in the analyst’s research notes. Jewsikow noted that Tesla’s fundamentals “continue to deteriorate at an alarming rate” and believes that Tesla’s shares are being driven largely by its robotaxi launch in Austin and political narratives in the short term. Jewsikow has set a price target of $175 for TSLA stock, which implies a massive 46.2% downside potential from current levels.

Cramer Stays Bullish on Tesla Despite Wall Street Downgrades

While many on Wall Street have downgraded Tesla stock, Cramer has been mostly optimistic about Tesla’s long-term outlook and believes that investors should continue to own the stock. In his recent comments on CNBC’s Squawk on the Street, the renowned stock market expert pushed back against the latest wave of downgrades on TSLA stock. He referred to Guggenheim’s “Sell” rating and said that if we remove the word “Sell” from the research note, the thesis implies a very bullish stance on the electric vehicle (EV) maker.

Cramer expressed enthusiasm for Tesla’s robotaxi initiative, noting the sightings of driverless vehicles in Austin. Despite acknowledging that Tesla may face short-term headwinds, Cramer reiterated that he would “neverrrr sell Tesla in this.”

Why Is Guggenheim Bearish on Tesla Stock?

Jewsikow is concerned about “soft” Q2 deliveries, since delivery trends are indicating that demand for Tesla’s revamped Model Y autos has not helped in bolstering the sales momentum. The analyst also expects “sizable” downward revisions to the EV maker’s Q2 delivery estimates in the coming weeks. He is disappointed that the Model Y refresh has not boosted pent-up demand for Tesla’s EVs in Q2, which leads him to believe that Tesla’s auto delivery volumes and/or pricing could deteriorate further.

Notably, Jewsikow’s auto delivery estimate for Q2 of 360,000 is already significantly below the consensus of 415,000. Accordingly, the analyst predicts that lower auto sales will impact Tesla’s auto gross margins, which he projects at 11.5%, way-below the consensus estimate of 14% He also expects free cash flows to turn negative. Jewsikow is concerned that expectations for Tesla stock in 2025 and 2026 remain overly optimistic while “bullish catalysts for the automotive business continue to be disproven.”

Is Tesla a Buy, Hold, or Sell Right Now?

On TipRanks, TSLA stock currently has a Hold consensus rating, as analysts remain concerned about ongoing challenges. This is based on 14 Buys, 12 Holds, and nine Sell ratings received in the last three months. Also, the average Tesla price target of $286.14 implies 12% downside potential from current levels. Year-to-date, TSLA stock has lost 19.5%.

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