A growing chorus of Wall Streeters covering Tesla shares are getting more cautious about the name as 2023 approaches, adding to a brutal month and year.
EvercoreISI analyst Chris McNally cut his price target on Tesla shares to $200 from $300 on Tuesday, joining bearish holds last week from Goldman Sachs, Wedbush and Oppenheimer.
“While we continue to view Tesla as having a leading global EV gross margin advantage, vertical integration and the U.S. IRA [Inflation Reduction Act] benefits, it is impossible to ignore that investors are already well aware of these benefits, but must now ALSO battle against demand assumptions for 2023-2025,” McNally said in a new note to clients.
Tesla shares fell another 8% in Tuesday trading, closing at a low not seen since late 2020.
McNally added: “While a positive review cycle cannot be done forever (IRA a powerful unit/margin amplifier), it is hard to ignore the drift from the prevailing Tesla thesis of 1) Unlimited Ask/Rev at 2) Margin ‘history’, which has occurred in the last 6-12 months.”
McNally’s take comes after a frantic day for Tesla investors.
Shares of the electric vehicle maker opened Monday on hopes that CEO Elon Musk would step down from the same post on Twitter.
“Should I leave the head of Twitter? I will respect the results of this poll,” Musk said. tweeted to his 122.1 million followers on Sunday.
the survey closed Monday morningwith 57.5% of the 17.5 million votes choosing “Yes”.
Musk did not reveal if he would step down.
Tesla shares ended Monday’s session down slightly, reflecting the broader market.
“You need a Twitter CEO who isn’t Musk,” Ives said on Yahoo Finance Live Friday. “That’s what I would say is an untenable situation in terms of him being CEO of Twitter and Tesla.”
Shares of the electric vehicle maker are down about 63% from their peak last November — biggest drop in stock since its market debut in 2010 – and down 23% so far this month alone.
Most of the losses for Tesla investors began following Musk’s April offer to buy Twitter, a deal that was reached in late October.
Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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