Tesla’s price cuts could see demand waning, warns Wells Fargo
Robert Besser
18 Mar 2024, 02:58 GMT+10
Tesla’s price cuts could see demand waning, warns Wells Fargo
Robert Besser
18 Mar 2024, 02:58 GMT+10
- Wells Fargo raised concerns over the waning impact of price cuts by Tesla on the demand for its electric vehicles and downgraded them to “underweight”
- Tesla’s shares dropped some two percent after the announcement
- After last year’s price war that narrowed margins, Tesla has faced a global slowdown in EV demand ad lost nearly $200 billion in market value
SAN FRANCISCO, California: This week, Wells Fargo raised concerns over the waning impact of price cuts by Tesla, the world’s most valuable automaker, on the demand for its electric vehicles (EV) and downgraded them to “underweight.”
Tesla’s shares dropped some two percent after the announcement.
After last year’s price war that narrowed margins, Tesla has faced a global slowdown in EV demand ad lost nearly $200 billion in market value, with its shares declining nearly 29 percent this year.
Wells Fargo also downgraded Tesla’s price target from $200 to $120, one of the lowest on Wall Street.
Since CEO Elon Musk warned in January that growth would be “notably lower” this year, investors have been concerned about the company’s prospects.
In 2024, Tesla has lagged other “Magnificent Seven” stocks, including Microsoft, Apple, Nvidia, Amazon, Alphabet and Meta Platforms.
However, among the seven companies, the EV maker still has the highest forward price-to-earnings ratio of 52, as analysts lowered their estimates for earnings.
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