Tesla is the worst performing stock in the S&P 500.Analysts say stock prices need to fall further

new york
CNN
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Elon Musk’s Tesla once represented the future of car manufacturing. The future of the company itself is now in question.

The once-hot electric car maker — known as part of the so-called Magnificent Seven tech giants — is currently the worst performer in the S&P 500 this year, losing 32 points since January. It has fallen by almost %.

The story of Tesla’s (TSLA) decline is well documented. The company has been plagued by safety issues and recalls, slowing growth and even being forced to cut prices. But a new report released Wednesday by Wells Fargo analyst Colin Langan paints a bleaker picture than previously imagined.

Tesla is a “growth company without growth,” he wrote.

Langan expects Tesla’s growth to remain flat this year and slow in 2025 due to increased competition, disappointing delivery results and the beleaguered auto and technology company being forced to cut prices again. ing.

UBS also lowered its outlook for Tesla on Wednesday. Analysts said concerns are growing as demand for electric vehicles slows and China begins to compete in the market.

All Magnificent Seven companies except Tesla (which also includes Apple, Amazon, Meta, Google, Nvidia, and Microsoft) posted double- or triple-digit profit growth in the last three months of 2023. Tesla reported his 40% profit. Profits decreased compared to the previous year.

Tesla has weathered a perfect storm. The EV landscape is becoming increasingly crowded as the company’s fundamentals are called into question. The stock price has fallen about 60% from its all-time high of $407 in 2021.

But Langan said that despite the recent price drop, Tesla stock remains very expensive compared to its actual revenue and profits. He said the company’s once fast growth trend is no longer certain and the stock price is likely to fall further.

Wells Fargo lowered its price target on the stock from $200 to $125, predicting an additional 25% decline in value. Meanwhile, UBS lowered its price target to $165 from $225.