Down about 40% year-to-date, Tesla (NASDAQ:TSLA) is among the worst-performing S&P 500 (SPX) stocks. Despite this considerable drop in value, Deutsche Bank analyst Emmanuel Rosner sees room for further decline. Rosner downgraded shares of the Electric Vehicle (EV) titan to Hold from Buy and lowered the price target to $123 from $89, implying approximately 18% downside potential from current levels.
The analyst points to a likely delay in Tesla’s launch of the affordable Model 2 and the company’s pivot towards Robotaxi as reasons for the downgrade. Rosner believes the Model 2 launch delay will strain earnings and cash flows for 2026 and beyond.
The analyst views Tesla’s transition towards Robotaxi as a significant change in strategy, raising concerns because allocating resources to develop Robotaxi, an untested market segment, poses risks for investors.
Tesla Faces Headwinds
Tesla is grappling with slowing demand and heightened competition. Amid challenges, the company cut the subscription price of its Full Self-Driving (FSD) package to boost adoption. Moreover, Tesla announced a workforce reduction to support its earnings. However, these measures have failed to raise its stock price.
On April 16, JPMorgan analyst Ryan Brinkman cautioned about potential downside risks in Tesla stock and reiterated the Sell rating. The analyst’s price target of $115 implies a 23.3% downside potential from current levels.
Echoing similar sentiment, Gordon Johnson, a GLJ Research analyst, sees significant downside potential in TSLA stock. The analyst lowered TSLA’s price target to $22.86 from $23.53 on April 16, implying a downside potential of 84.45%.
Is Tesla a Buy, Sell, or Hold?
Wall Street remains sidelined on TSLA stock. Tesla stock has eight Buys, 19 Holds, and seven Sell recommendations for a Hold consensus rating. The average price target on Tesla stock of $184.86 implies about 23.3% upside potential from current levels.
