TLDR
- Tesla’s stock dropped 4.3% last week, falling for the 11th time in 13 weeks
- Q1 deliveries dropped 13% year-over-year to 336,681 vehicles, missing analysts’ expectations
- Barclays analyst Dan Levy cut price target from $325 to $275, citing “weak fundamentals”
- BNP Paribas reduced target to $137 from $150, maintaining a Sell rating
- Options traders expect a 10.41% move in either direction following April 22 earnings report
Tesla (TSLA) is set to report its first-quarter earnings on April 22, and Wall Street has mixed feelings about the electric vehicle maker’s prospects. The company’s stock has tumbled more than 40% so far this year, weighed down by several factors including disappointing delivery numbers and growing concerns about CEO Elon Musk’s political activities.
Tesla delivered about 336,681 vehicles in the first quarter, marking a 13% decline from the same period last year. This represents Tesla’s worst quarterly decline on record and fell about 40,000 vehicles short of Wall Street’s expectations.
The company’s stock dropped 4.3% last week while the S&P 500 fell 1.5%. For Tesla shares, this marked the 11th decline out of the past 13 weeks.
Analysts expect Tesla to report earnings of $0.43 per share, down 4% year-over-year, and revenues of $21.45 billion, up just 0.7%. The company has missed earnings expectations in five of the last nine quarters.
Wall Street Adjusts Expectations
Barclays analyst Dan Levy recently lowered his Tesla price target to $275 from $325 while maintaining a Hold rating on the stock. Levy described the setup ahead of earnings as “confusing.”
He pointed to weak fundamentals for Q1 and anticipated declines in gross margins due to reduced production volumes and inefficiencies. Levy also expects a decrease in vehicle deliveries in 2025.
BNP Paribas analyst Stuart Pearson has taken an even more cautious stance. He reduced his price target on Tesla to $137 from $150 while sticking with a Sell rating.
Pearson sees a tough road ahead as demand slows and profits shrink. He cited rising costs from tariffs, fewer emissions credit sales, and the risk of losing U.S. EV tax incentives as key headwinds.
With these challenges in mind, Pearson cut his 2026 earnings forecast for Tesla by 38%.
Multiple Factors Creating Uncertainty
Investors aren’t sure how much of Tesla’s sales decline is due to Musk’s political activities, which resulted in some protests at Tesla locations, and how much was due to the Model Y changeover. Tesla recently updated its most popular model.
Then there are tariffs, which could raise the cost of parts for Tesla. The exact impact is difficult to quantify.
Wall Street started the year projecting about 2.1 million deliveries for 2025. That number has since dropped to about 1.8 million – roughly the same number Tesla delivered in both 2023 and 2024.
Potential Bright Spots Ahead
Despite the challenges, there are some potential positives on the horizon. Levy sees the possibility that Musk might spend more time at Tesla instead of in Washington, D.C., which investors would likely view as a good thing.
Tesla also plans to launch a robotaxi service in June and start selling a new lower-priced model later in 2025. Both developments could boost investor sentiment, provided Tesla sticks to its announced timelines.
According to data from TipRanks, Tesla stock currently has a Hold consensus rating, based on 16 Buys, 11 Holds, and 12 Sell ratings. The average Tesla price target stands at $298.38, implying a potential upside of 23.62% from current levels.
Options traders are preparing for some post-earnings volatility. Using TipRanks’ Options tool, we can see that options traders are expecting a 10.41% move in either direction following the earnings announcement.
The Model Y remained one of Tesla’s best performers despite the overall slowdown. According to Main Street Data, Tesla delivered about 324,000 units of the Model 3 and Model Y in Q1, with another 12,900 coming from other models, including the Cybertruck.
With the recent price target cut from Barclays, the average analyst price target for Tesla stock is now about $327 a share, according to FactSet. A year ago, it was $192. The average price target peaked at $381 a share in early February before investors started to worry about the impact of Musk’s political activities on sales.
Tesla’s Q1 earnings report on April 22 will likely provide more clarity on many of these issues. Investors will be watching closely for any comments from management about delivery expectations for the rest of the year, progress on new models, and the impact of external factors like tariffs.
The company’s ability to navigate these challenges will be crucial in determining whether it can reverse the recent downward trend in its stock price.
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