Tesla (TSLA) rolls into its earnings day under the shadow of a fresh bearish call. Just ahead of its highly anticipated Q1 results on April 22, after market close, Wells Fargo issued a fresh Sell rating on TSLA stock, adding to mounting concerns on Wall Street. Investor’s nerves are on edge with Tesla’s weak deliveries and growing brand criticism, and this fresh bearish call isn’t helping the mood. TSLA stock declined by almost 6% on Monday.
Wells Fargo Projects Lower Q1 Earnings
Yesterday, Wells Fargo’s Colin Langan reiterated his Sell rating on TSLA stock, predicting a 43% downside from current levels.
Langan’s cautious stance on Tesla stems from several headwinds weighing on the company’s outlook. He expects Tesla’s Q1 earnings to take a hit, with projected EPS at $0.34, well below the $0.42 consensus estimate. The decline is largely due to reduced operating leverage caused by weak delivery numbers, despite some gains from refreshed Model Y pricing.
Furthermore, Langan cut his full-year delivery forecast for 2025, pointing to waning demand for key models like the Model Y and Cybertruck. He further stated that the lack of concrete updates on the long-awaited Model 2 adds to the negative sentiment. While there have been minor pricing improvements across select models, Langan argues these are not enough to offset the broader fundamental challenges Tesla is facing.
Barclays Sticks to Neutral Rating
Meanwhile, Barclays’ Dan Levy maintained his Hold rating on TSLA stock yesterday, predicting an upside of 20%.
Last week, Levy reduced his price target on TSLA stock from $325 to $275. Levy points to concerns over weak fundamentals, with Tesla’s Q1 auto margin (excluding credits) expected to hit a new low. He also noted that achieving volume growth in 2025 could become progressively challenging for the company.
What Is the 12-Month Price Target for Tesla Stock?
The recent Sell rating on Tesla adds to the growing skepticism surrounding the company’s near-term performance, especially ahead of its Q1 earnings report. As analysts remain divided, the broader consensus highlights concerns over sluggish performance, declining margins, and uncertain vehicle delivery growth in 2025.
According to TipRanks, TSLA stock has received a Hold consensus rating, with 16 Buys, 11 Holds, and 12 Sells assigned in the last three months. The average price target for Tesla shares is $296.66, suggesting a potential upside of 30.4% from the current level.
