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On Wednesday, Piper Sandler adjusted its outlook for Tesla stock (NASDAQ:TSLA), reducing the price target from $450 to $400 while retaining an Overweight rating. The reevaluation comes as the electric vehicle manufacturer’s first-quarter financials are anticipated to disappoint, with deliveries falling short of expectations. InvestingPro data shows 12 analysts have recently revised their earnings estimates downward, with the company’s next earnings report due on April 22. Tesla reported deliveries of 337,000 units, which did not meet the consensus estimate of 378,000. The concern over margins appears justified, as InvestingPro data reveals Tesla’s gross profit margin stands at 17.86%, while the company maintains a notably high P/E ratio of 113.57.
The firm’s analyst cited the lack of information on Tesla’s "Model 2" as a factor contributing to the uncertainty surrounding the company’s delivery growth. Without disclosed specifications or pricing for the new model, projections are more challenging to formulate. In response to these factors, Piper Sandler has revised its estimates for the automaker, though InvestingPro’s comprehensive analysis reveals Tesla remains a profitable company with $97.69 billion in trailing twelve-month revenue.
Despite the near-term bearish outlook for the next two to three months, the firm reminds investors of Tesla’s potential to experience sharp rallies triggered by significant developments. Piper Sandler points to forthcoming products and the advancement of robo-taxis as major catalysts that could positively impact Tesla’s performance in the future. The firm suggests that while the Q1 earnings call may not present these developments, good news on these fronts is expected eventually, indicating a bullish stance in the long term.
Investors are advised to maintain awareness of Tesla’s "big picture" prospects, as the company has the potential to deliver positive surprises on major initiatives. Piper Sandler’s stance implies that despite the current challenges, Tesla’s stock may offer upside opportunities aligned with the company’s ability to realize its ambitious plans.
In other recent news, Tesla has been in the spotlight following multiple developments. The company has faced challenges after a man was charged with arson attacks on a Tesla dealership in New Mexico, resulting in damage to two Tesla Model Y vehicles. Despite these incidents, analysts have maintained a positive outlook on Tesla’s stock. Cantor Fitzgerald reiterated its Overweight rating, highlighting Tesla’s focus on domestic sourcing and vertical integration as strategic advantages. However, RBC Capital Markets adjusted its price target for Tesla from $320 to $314, citing anticipated lower car volumes.
Tesla’s stock continues to attract attention from investors, with Cantor Fitzgerald noting potential challenges in consumer perception due to CEO Elon Musk’s political positions. In contrast, RBC Capital Markets emphasized that Tesla’s valuation heavily relies on its Robotaxi and Full Self-Driving (FSD) capabilities, which are expected to remain resilient against tariffs. These recent developments underscore the complex factors influencing Tesla’s market position.
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