More Trouble Ahead for Tesla (TSLA) Shareholders, Barclays Warns
Tesla’s stock has dropped 25% over the past month, and Barclays predicts further declines for TSLA investors. Analyst Dan Levy has presented a cautious outlook, indicating that more challenges are ahead for the electric vehicle maker’s stock.
- Sharp Decline: The stock’s recent drop signals increasing concerns about Tesla’s future performance.
- Negative Forecast: Levy’s analysis highlights weak fundamentals as the driving force behind the stock’s struggles.
Levy explains that Tesla’s stock boost following Donald Trump’s re-election has largely dissipated, with the price now more closely reflecting Tesla’s underlying fundamentals.
- Post-Election Surge: Tesla’s stock surge post-election was driven by optimism but now seems unsustainable.
- Focus Shifting: As technical factors fade, the market is paying more attention to Tesla’s long-term fundamentals.
Levy predicts a difficult period for TSLA, attributing the stock’s earlier rally to a mix of euphoria and technical factors that are no longer in play.
- Rally Unwinding: The initial excitement is fading as the stock returns to reflect real business performance.
- Re-evaluation: Investors are now revisiting Tesla’s fundamentals, which are less promising.
Levy has set a Hold rating for TSLA stock, with a price target of $325, which is about 6% above its current level.
- Limited Upside: The $325 target indicates minimal near-term growth.
- Hold Rating: While not advising a sell, the analyst suggests that the stock’s potential remains limited for now.
Few Catalysts for Short-Term Growth
Levy’s note highlights that Tesla’s performance is unlikely to improve in the near future due to a lack of significant short-term catalysts. Tesla is also expected to report disappointing first-quarter earnings, adding more downward pressure on the stock.
- Profit Concerns: The analyst is increasingly pessimistic about Tesla’s ability to boost profit margins.
- Weak Financial Results: Analysts expect the first-quarter results to disappoint, further weighing down the stock.
One potential bright spot is Tesla’s Robotaxi launch expected in June. If the launch goes well, it could act as a positive catalyst for TSLA stock.
- Robotaxi Launch: The launch may spark investor interest, boosting stock activity.
- Short-Term Response: However, a “sell the news” scenario could lead to a quick sell-off after the event.
Despite this potential, TSLA stock has already declined by 10% over the past three months.
- Recent Losses: Tesla has been struggling in the short term, showing a marked decline in recent months.
