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Investing.com -- Piper Sandler has trimmed its price target on Tesla (NASDAQ:TSLA) shares to $400 from $450 as the brokerage expects the carmaker to deliver an underwhelming first-quarter report.
The firm’s analysts believe the upcoming print will be a “non-event, at best,” unless Tesla provides specific updates on future vehicle platforms or its robo-taxi ambitions.
The downward revision comes after Tesla missed consensus delivery estimates in the first quarter, with 337,000 units versus the expected 378,000. This shortfall is seen as a likely drag on margins.
“Gross margin is probably trending near multi-year lows,” Piper Sandler analysts Alexander Potter and Ben Johnson said in a note.
Alongside the price target, the analysts also lowered their earnings estimates for 2025 and 2026, with earnings per share (EPS) now projected at $2.30 and $3,.33 respectively.
Investor attention has recently been directed toward Tesla’s progress on its so-called “Model 2” vehicle and autonomous ride-hailing strategy. But the analysts noted that without disclosures on specs or pricing, it is ”hard to rely on new products for delivery growth.”
They added that Tesla typically avoids using earnings calls to unveil product news, so expectations for meaningful updates during the April 22 report may not be met.
Despite the near-term caution, the brokerage continues to flag the potential upside tied to full self-driving (FSD) software.
“Full self-driving (FSD) software accounts for the bulk of our 20-year profit outlook,” the analysts said. They believe even a single headline about robo-taxis “would likely change the narrative.”
Piper Sandler’s reduced price target still assumes a 120x multiple on 2026 EPS, underlining the long-term optionality the firm sees in Tesla’s technology roadmap.
“While our 2-3 month outlook leans bearish, remember that TSLA can rally sharply whenever "big picture" catalysts emerge,” the team continued.
Analysts said they do not expect significant updates during the Q1 call, but believe Tesla will eventually deliver positive news on upcoming products. “When that day arrives, we wouldn’t want to be underweight.”