Tesla (TSLA Stock) Is Doing a Lot of Things Correctly. So the Question Remains: Why Is This Analyst Lowering His Price Target?

TSLA Stock

Credits for taxes, increased capacity, and greater output. These days, there are a lot of positive developments surrounding Tesla (TSLA stock). Despite this, Wall Street is becoming increasingly concerned about the short-term picture, which is causing price forecasts for Tesla stock to decrease somewhat.

TSLA Stock Target Price

The price objective that Mizuho analyst Vijay Rakesh has set for Tesla (NASDAQ:TSLA) has been reduced from $391.67 to $370 per share. He did not change his rating for the stock, which was Buy.

Rakesh said in his assessment that “Supply and logistics continue to be an issue,” which is what prompted him to reduce his expectations for sales during the third quarter and profits per share from $23.2 billion and $1.02 to $21.9 billion and 95 cents, respectively. This is lower than what the majority of analysts on Wall Street are expecting for the company’s third quarter, which is projected to have sales of $22.4 billion and earnings of $1.04 per share.

Not just at Tesla (TSLA stock) but also at the Chinese electric vehicle manufacturer NIO (NIO stock), Rakesh predicted that September deliveries would be slow. Because of this, he is feeling a bit uneasy. Nevertheless, in spite of the rough period, he still recommends buying shares in NIO, Tesla, and Rivian Automotive (RIVN). “Despite some near-term concerns, we continue to see vertically-integrated electric vehicle (EV) firms that are well-positioned with secular growth drivers” (The abbreviation ICE stands for “internal combustion engine.”)

Rakesh is of the opinion that pure-play electric vehicle manufacturers would have an easier time gaining market share from ICE companies. In his analysis, he mentioned as well that future policies had to be able to assist in the sales of electric vehicles. There is also the recently enacted federal purchase tax credit that may be worth up to $7,500 for each electric vehicle. Additionally, China has extended some tax advantages for the purchase of electric vehicles through the year 2025.

Rakesh is pleased to see that production is increasing at Tesla’s two new manufacturing sites in Texas and Germany. These factories both produce goods for Tesla.

It does not appear that his long-term confidence has been affected. Simply put, he is more anxious about what has been going on recently as a result of rising inflation and interest rate levels.

Since Tesla disclosed deliveries that were worse than expected on October 2, the average price objective that analysts have for Tesla shares has decreased to about $299 from approximately $301. There have been no changes to the ratings, and the majority of the analysts covering Tesla stock continue to recommend purchasing the company’s shares. About 58% of the companies included in the S&P 500 have a Buy rating on average, according to the rating system.

In premarket trading on Thursday, Tesla (TSLA Stock) shares had a decrease of 1.2%. Futures contracts for the S&P 500 and the Dow Jones Industrial AverageDJIA –0.22% were both trading 0.4% lower. The reduction of the aim is certainly not as significant as the continuing spat between CEO Elon Musk and Twitter (TWTR).


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About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.