Tesla, Inc. (TSLA) has recalled 130,000 vehicles in the U.S. due to touchscreen display malfunction, according to Reuters. TSLA shares dropped 9% at the end of trade on Monday.
This vehicle recall includes all of the company’s models manufactured between 2021 and 2022. Tesla will provide an over-the-air software update to resolve the issue.
The problem with the touch screens is related to overheating, which can lead to a malfunction in the center of the screens and prevent image display from the rearview camera, warning lights, and other info.
The development comes just on the heels of the company clearing rumors about production stoppage at its Shanghai factory. The company said that although the production at the Shanghai factory had not been halted, the move might be undertaken later this week amid logistical challenges.
Analyst’s Take
Berenberg Bank’s Adrian Yanoshik has reiterated a Hold rating on the stock alongside a price target of $900. Overall, the Street has a Moderate Buy consensus rating on Tesla based on 14 Buys, nine Holds, and five Sells.
The average Tesla price target of $977.54 implies a potential upside of 24.2%. That’s after a 34.4% slide in the share price so far this year.
Hedge Funds Lower the Stakes
While analysts are cautiously optimistic about the stock, TipRanks data indicates hedge fund confidence signal in the stock remains very negative based on the activities of 28 hedge funds. Hedge funds decreased holdings in Tesla by 2.4 million shares in the last quarter.
Closing Note
Tesla’s market cap has already slid below the $900 billion mark. Amid broader market turmoil, this vehicle recall may further harm investor sentiment in the stock, which, despite the recent price decline, is still trading at a forward P/E multiple of about 63.
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