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On Friday, analysts at Goldman Sachs reduced the price target for Tesla stock (NASDAQ: NASDAQ:TSLA) to $285 from $295, while maintaining a Neutral rating on the stock. Currently trading at $284.70, Tesla shares have declined nearly 18% in the past week. According to InvestingPro data, 22 analysts have recently revised their earnings estimates downward, with the stock currently trading above its Fair Value. This adjustment reflects revised expectations for Tesla’s vehicle deliveries and earnings per share (EPS) forecasts.
The analysts cited weaker monthly data in key regions, including the United States, Europe, and China, as a basis for their revised outlook. In the U.S., Tesla’s quarter-to-date deliveries through May are reportedly down mid-teens year-over-year, according to Wards and Motor Intelligence. In Europe, registration data for April showed a roughly 50% year-over-year decline, with May data indicating a mid-20% decline. In China, data from the China Passenger Car Association (CPCA) in April and insurance data for May indicated a low single-digit sequential increase, but a 20% year-over-year decrease compared to the same period last year. Despite these challenges, Tesla maintains strong financials with $95.7 billion in trailing twelve-month revenue and a market capitalization of $917 billion. Want deeper insights? InvestingPro offers exclusive access to 18 additional ProTips and comprehensive financial analysis for Tesla.
Goldman Sachs now expects Tesla’s second-quarter deliveries to range between 335,000 and 395,000 vehicles, depending on June’s performance and the extent of incentives Tesla might use. Their base case forecast is for 365,000 deliveries, down from a previous estimate of 410,000 and below the Visible Alpha Consensus Data of 417,000.
The analysts also noted consumer survey data from HundredX and Morning Consult as factors influencing their revised delivery assumptions and EPS estimates.
In other recent news, Tesla Inc. reported a notable decrease in sales across several key markets. In Germany, Tesla’s sales volume fell by 36.2% in May compared to the same period last year, as per the German road traffic agency, KBA. This decline occurred despite a 44.9% rise in overall electric vehicle registrations in the country, highlighting a shift in consumer preferences. Similarly, Tesla’s shipments in China saw a 15% year-on-year drop in May, according to the China Passenger Car Association, although there was a 5.5% increase from April’s figures. In Spain, Tesla experienced a 29% decline in May sales compared to the previous year, as reported by industry group ANFAC.
On a strategic note, Tesla’s Model 3 and Model Y have been included in a Chinese government-supported campaign aimed at boosting sales in rural regions. Piper Sandler analysts reiterated an Overweight rating for Tesla, citing the company’s unique supply chain strategy. Tesla’s efforts to reduce reliance on Chinese resources by vertically integrating its battery production were highlighted as a key differentiator. Despite these strategic moves, the company faces challenges in achieving complete insulation from China in the near future.
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