Wall Street analysts continue to be worried about the EV major, Tesla (NASDAQ: TSLA) as Jeffries top-rated analyst Philippe Houchois downgraded the stock to a Hold from a Buy and lowered the price target to $185 from $230. The analyst’s price target implies an upside potential of 15.1% at current levels.
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Similar to other analysts, Houchois remains concerned about Tesla’s margins and its price “elasticity.” Tesla has been slashing the prices of its vehicles globally but raised the prices of its more expensive models in the U.S. earlier this month. The company has been doing this to pursue higher volumes even as it sacrifices its profit margins.
However, the analyst warned that more price cuts are likely to have less impact on the company’s sales and commented, “However fascinating the investment case remains, relative price aggression is not supportive of a high multiple investment case while unfolding.”
Houchois added, “With multiple technical edges from software to batteries and manufacturing productivity, Tesla clearly over-performs on engineering but has fallen behind in building skills in marketing and product planning.”
Analysts remain cautiously optimistic about TSLA stock with a Moderate Buy consensus rating based on 16 Buys, 12 Holds, and four Sells.
