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Here’s Why TSLA Stock Lost 5% on Tuesday
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Here’s Why TSLA Stock Lost 5% on Tuesday

Story Highlights

Tesla announces another job cut to deal with rising costs. Which office/plant has been targeted this time?

Tesla, Inc. (NASDAQ: TSLA) is shuttering one of its offices in San Mateo, California, and laying off more than 50% of its workforce there, The Wall Street Journal reported, citing people with knowledge of the matter.

The decision forms a part of the company’s plan to reduce its headcount to deal with increasing costs. The staff at the San Mateo office worked on the EV giant’s advanced driver-assistance system, Autopilot.

Around 200 people who will be laid off include salaried and hourly staff. Some of them will be relocated within the company.

Meanwhile, Tesla is scheduled to release its second-quarter vehicle delivery figures early next month.

Wall Street’s Take

Last week, Credit Suisse (NYSE: CS) analyst Dan Levy maintained a Buy rating on the stock but lowered the price target to $1,000 from $1,125 (43.3% upside potential).

Levy expects Tesla to deliver 242,000 vehicles in the second quarter of 2022, compared with the Street’s estimate of around 273,000 vehicles.

The analyst said, “We continue to believe in our thesis that robust fundamentals ahead should outweigh the near-term challenges for Tesla such as the recent growth selloff, production disruptions in China, lingering semiconductor shortage and magnified inflationary pressures.”

Deutsche Bank (NYSE: DB) has also cut its second-quarter estimate of vehicle deliveries by 65,000 to 245,000 units.

Emmanuel Rosner of Deutsche Bank recently reiterated a Buy rating on TSLA with a price target of $1,125 (61.2% upside potential).

Additionally, Morgan Stanley (NYSE: MS) analyst Adam Jonas trimmed Tesla’s estimates for the second quarter due to supply chain issues and lower volumes.

The analyst maintained a Buy rating on the stock and reduced the price target from $1,300 to $1,200 (72% upside potential).

Overall, the stock has a Moderate Buy consensus rating based on 16 Buys, eight Holds and six Sells. TSLA’s average price target of $899.86 implies 29% upside potential from current levels. Shares have lost 35.7% over the past six months.

Conclusion

Following the release of the news on Tuesday, TSLA stock lost 5% to close at $697.99. In the past few weeks, the company has announced a series of job cuts after incurring billions of dollars of losses because of battery-cell manufacturing challenges and supply-chain disruptions.

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