Tesla (NASDAQ:TSLA) often sparks debate over whether it should be considered a car company or more of a tech play. But what if it’s actually more like… a beverage company?
Ok, that might be a far-fetched notion, but Stifel analyst Stephen Gengaro believes Tesla’s recent developments resemble the Bud Light kerfuffle from a couple of years ago.
Gengaro uses a personal anecdote to illustrate. During a golf tournament held around the time when the Bud Light ad with transgender activist Dylan Mulvaney was receiving widespread attention on social media, Mulvaney says there were large coolers filled with various beer brands scattered across the course. By mid-afternoon, the analyst noticed that many golfers were actively avoiding Bud Light as part of a boycott in response to the company’s position on a divisive issue.
“The point is,” the analyst goes on to say, “in reaction to actions taken by a company, sales were slumping – at least temporarily. We have seen this same trend multiple times including the Nike/Colin Kaepernick commercial, the Target bathroom situation, and several others.”
And this appears to be happening to Tesla right now. Recent data has showed that Tesla sales have been falling dramatically in Europe, with Elon Musk’s close ties to the Trump administration and support of far-right parties on the continent drawing a huge backlash. And the same negative sentiment appears to be taking hold domestically.
Data from Stifel’s Think Tank Group on Tesla’s net favorability rating and net purchase consideration by political affiliation is showing some interesting trends. The data shows that net purchase consideration among Democrats has declined to -42%, down from about -31% in August 2024. At the same time, net purchase consideration among Republicans rose to -13%, an improvement from -26% in the same period.
“We attribute this inflection point since August 2024 to numerous factors, with the largest driver being Elon Musk’s endorsement of President Trumps’s 2024 presidential candidacy, pledging large donations to the Trump campaign, and his role in DOGE,” Gengaro commented on the matter.
These changing trends could be leading to short-term sales issues for Tesla since Democrats have traditionally been much more likely to buy EVs than Republicans.
“We continuously monitor these movements as Elon Musk plays a crucial involvement and remains closely tied with the Trump administration, which may continue to influence reactions in the space,” the analyst further said.
However, for now Gengaro remains a TSLA bull, maintaining a Buy rating on the shares along with a $474 price target. This target suggests the stock will be changing hands for a 74% premium a year from now.(To watch Gengaro’s track record, click here)
Overall, of the 35 analyst reviews submitted during the past 3 months, the ratings breakdown into 13 Buys, 12 Holds and 10 Sells, all culminating in a Hold (i.e., Neutral) consensus rating. At $347.59, the average price target offers one-year upside of ~28%. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.