Wells Fargo analyst Colin Langan has maintained their bearish stance on TSLA stock, giving a Sell rating yesterday.
Colin Langan’s rating is based on several concerns regarding Tesla’s current market position and future prospects. He notes a decline in delivery growth and a reduction in returns from price cuts, which are expected to contribute to a significant year-over-year drop in automotive gross margins, excluding credits, in 2025. Additionally, Langan expresses skepticism about the deployment of the CyberCab in Austin, citing limited unsupervised testing and safety concerns with Tesla’s autonomous vehicle technology.
Furthermore, Langan highlights the challenges Tesla faces in key markets such as the US, EU, and China, where growth trends are moderating. The company has limited options to boost volumes aside from pricing adjustments and model updates, and aggressive financing promotions have not sufficiently salvaged deliveries. The anticipated launch of a more affordable model has been quiet, and there are concerns about potential cannibalization of existing models. With the possibility of reduced EV buyer credits and increased competition from Chinese automakers, Tesla’s growth prospects appear constrained. Additionally, the stock’s valuation is high compared to peers, and regulatory risks around Autopilot could further impact the company’s outlook.
Langan covers the Consumer Cyclical sector, focusing on stocks such as Tesla, Dana Holding, and Aptiv. According to TipRanks, Langan has an average return of -6.8% and a 45.53% success rate on recommended stocks.
In another report released yesterday, GLJ Research also maintained a Sell rating on the stock with a $24.86 price target.