Tesla (NASDAQ:TSLA) has unexpectedly hiked the price of its Model X Plaid all-wheel drive (AWD) from $89,990 to $94,990 in the United States. This is surprising, as the company has been cutting the average sales price of its vehicles to drive volumes and maintain its dominant position in the EV (Electric Vehicle) space.
Tesla CEO Elon Musk emphasized during the Q3 conference call that the elevated interest rate environment has increased the overall cost of purchasing a car. However, the company could continue to lower the prices of its vehicles further to drive volumes by making its EVs affordable amid increased competition and softening demand.
Echoing similar sentiments, Goldman Sachs analyst Mark Delaney reduced his earnings estimate on October 18 and lowered the price target on Tesla stock to $235 from $265. Delaney expects lower pricing to offset the benefits from cost reductions and weigh on the company’s EPS in 2024.
Given the near-term challenges, the analyst maintained a Hold recommendation on Tesla stock. However, Delaney remains upbeat about the company’s long-term prospects. The analyst believes that Tesla would maintain its leadership in the EV space due to “its ability to offer full solutions including charging, storage, software/FSD and services, and with a strong cost structure.” With this backdrop, let’s look at the analysts’ consensus rating for Tesla stock.
Is Tesla Stock a Buy, Sell, or Hold?
The near-term pressure on its margins from price cuts keeps analysts cautiously optimistic about Tesla stock. Per Wall Street analysts’ consensus rating, Tesla sports a Moderate Buy rating, reflecting 13 Buy, 14 Hold, and four Sell recommendations. Meanwhile, their average price target of $254 implies an upside potential of 15.4% over the next 12 months.
