2024 has so far turned out to be a challenging year for Electric Vehicle (EV) giant Tesla (NASDAQ:TSLA). Slowing demand, inventory concerns, and price competition have weighed on TSLA stock. Adding to its setbacks, the Wall Street Journal reported that Tesla has delayed the deliveries of its Cybertruck.
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Per the report, Tesla has postponed the scheduled delivery dates of its pickup truck without providing any explanation. This adds to the number of challenges the automaker is grappling with, including slowing demand for its electric vehicles and heightened competitive activity, especially in China.
Amid concerns, Tesla lowered the subscription fee for its Full Self-Driving (FSD) package to drive adoption. Moreover, the company announced job cuts to cushion earnings. However, these measures have failed to spur a recovery in TSLA stock, which is down about 37% year-to-date, underperforming the S&P 500’s (SPX) nearly 6.12% gain.
Analysts See Challenges Ahead
While Tesla is taking measures to accelerate growth and cushion its earnings, analysts see challenges ahead. In a note to investors dated April 16, JPMorgan analyst Ryan Brinkman said that Tesla’s reduction in its workforce suggests that the lower-than-expected Q1 deliveries stemmed from reduced demand rather than supply constraints. Brinkman maintained a Sell rating on TSLA stock and sees downside risk. His price target of $115 implies 26.8% downside potential from current levels.
Echoing similar sentiments, GLJ Research analyst Gordon Johnson lowered his price target on TSLA stock to $22.86 from $23.53, implying a downside potential of 84.45%. Johnson maintained a Sell rating on TSLA stock. The analyst lowered his Q2 delivery numbers and expects sales to take a significant hit from lower volumes and pricing.
Is Tesla a Buy, Sell, or Hold?
Given the ongoing demand headwinds and pressure on earnings, analysts prefer to remain sidelined on TSLA stock. With nine Buys, 19 Holds, and seven Sell recommendations, TSLA stock has a Hold consensus rating. The analysts’ average Tesla stock price target is $196.72, implying 25.21 % upside potential from current levels.
