Shares of the electric carmaker Tesla (TSLA +2.59%) once again found the red today, as stocks extended their sell-off and another analyst lowered his price target on the stock. Tesla is trading about 5% lower as of 11:08 a.m. ET.
More concerns about first-quarter deliveries
Stifel Financial analyst Stephen Gengaro issued a report this morning, lowering his price target on Tesla by $19 to $455. This still implies over 72% upside, and Gengaro maintained his buy rating on the stock. Gengaro's near-term concerns are shared by a growing chorus of analysts who expect Tesla to report weaker first-quarter deliveries due to a slow launch of Tesla's new Model Y, a potential hit from CEO Elon Musk's foray into politics, and reports of vandalism to Tesla vehicles.
Still, Gengaro is bullish long-term and thinks current headwinds are near-term issues. "The ramp of the new Model Y, the best-selling car in the world in 2024, is clearly a short-term sales headwind," Gengaro said in his note. "As Model Y production ramps in 2025, we expect sales to accelerate."
NASDAQ: TSLA
Key Data Points
Gengaro is also bullish on the upcoming launch of Tesla's unsupervised full-self-driving technology in Austin and the launch of a lower-cost vehicle later this year. Gengaro also thinks that the company's energy storage division could be another catalyst not baked into the stock price yet.
Weighing the risk-reward
Bearish analysts are more concerned about first-quarter deliveries, while bullish analysts are looking ahead to catalysts powered by Tesla's potential artificial intelligence capabilities, which Musk expects to power new businesses like self-driving and robotics. Those may pan out, but with Tesla still trading at 93 times forward earnings, I'm avoiding the stock for now.
At this kind of valuation, unexpected bad news from tariffs, the company's first-quarter earnings, or delays in future business launches could lead to big sell-offs, which is why I still don't like the risk-reward setup.
