Analysts cut their forecasts for Tesla stock after the company’s earnings missed expectations.
Wall Street is concerned about how the automaker will be affected by tariffs.
Despite Elon Musk’s comments about exiting DOGE, concerns remain about its political impact.
Tesla shares began their sharp decline after the automaker reported its latest quarterly results.
The automaker’s first quarter earnings missed expectations, with revenue of $19.3 billion, down 9% from the same period last year and also below expectations of $21.4 billion.
Tesla also made a series of mixed announcements to investors during its earnings call. For example, the company plans to launch a Robotaxi service and affordable Tesla models sometime this year, but it withdrew its 2025 automotive growth forecast given the uncertainty surrounding tariffs.
For some on Wall Street, this is yet another reason to cut Tesla’s expectations for the year ahead. Tesla shares closed at around $246 per share on Wednesday, but are still down 34% from where they started the year.
Here’s what analysts think of Elon Musk’s car company and how much they’re cutting their forecasts.
Goldman Sachs
Original target price: $260
New target price: $235
Percent change from current levels: -4%
Goldman Sachs noted that Tesla’s latest earnings call had both good and bad news, such as the expected launch of self-driving taxis, but withdrew its 2025 performance expectations. The analysts said Tesla’s long-term prospects look brighter, adding that they believe Tesla can get “long-term profit improvement” from fully autonomous driving technology.
“We continue to see downside risk to medium-term expectations given tariff costs and end-demand considerations, and we lower our outlook to reflect lower vehicle sales (due to company comments suggesting new models planned for later this year may not be as unique as we expected) and higher operating costs,” analysts wrote in a note Wednesday.
RBC Capital Markets
Original price target: $314
New price target: $307
Percent change from current levels: +24%
“There was a mixture of joy and pain,” RBC analyst Tom Narayan wrote in a note written after the call, noting how the automaker withdrew its 2025 growth forecast.
Tariffs could also have a significant impact on Tesla’s energy storage business, a bright spot in results, given that its batteries are sourced from China. On the automotive side, Narayan said the company appears “better positioned” to navigate changes in trade policy given that its Model Y is “the most American-made vehicle in the world.”
“We lower our delivery expectations and as a result our price target drops to $307,” Narayan wrote in a note on Tuesday. However, the firm maintained its “outperform” rating on the stock.
Cantor
Original price target: $425
New price target: $355
Percent change from current levels: +49%
Cantor reiterated its “overweight” rating on Tesla and expressed long-term bullishness on the company. The firm noted that Tesla’s expected launch of the Robotaxi, the introduction of lower-priced Tesla models, and news that Elon Musk may reduce his hours at DOGE starting in May. The firm added that this suggests Musk may have more time to devote to Tesla.
“That said, we are turning more conservative in the near term due to global macro uncertainty, the impact of tariffs on current and future demand (and energy storage business), and some negative consumer behavior/brand impacts from Elon’s polarizing political stance,” the analysts wrote.
“Overall, while Tesla shares are down ~41% YTD, we continue to view this as an attractive entry point for investors with an investment horizon greater than 12 months (and who can stomach volatility),” they added.
CFRA Research
Original price target: $360
New price target: $260
Percent change from current levels: +9%
CFRA Research downgraded Tesla to Hold from Buy.
Garrett Nelson, senior equity analyst at the firm, said the rating change and price cut were primarily driven by lower expectations for Tesla’s long-term growth, based on the firm’s latest data.
“Our downgrade to Hold reflects our mix of positive and negative investment factors,” Nelson wrote. “Our biggest concern is mid-term earnings growth expectations: we now believe that Tesla’s EPS will not rebound to 2023 levels until at least 2027.”
