Introduction:
Tesla’s first-quarter financial results didn’t meet Wall Street’s expectations, resulting in a downgrade by Tudor Pickering from Hold to Sell. As a result, Tesla’s shares fell more than 9%. Tesla’s stocks were on the rise before the downgrade, reaching a high of $780 per share on January 26th. However, after the company’s first-quarter results were announced, which were worse than expected, it fell by more than $200 per share.
Tudor Pickering’s downgrade of Tesla stock from Hold to Sell resulted from the automaker’s first-quarter results. Tesla’s margins were damaged by price cuts, resulting in the downgrade. Despite Tesla’s high gross revenue of $10.4 billion, which surpassed analysts’ expectations, the firm was unable to make a profit. In the first quarter, Tesla reported a net loss of $702 million.
Tudor Pickering’s report stated that Tesla’s sales volume increased significantly year over year, but margins suffered as a result of price cuts. The analyst firm stated that the price cuts were made in order to offset the loss of federal tax credits that previously incentivized Tesla purchases. The report also noted that Tesla’s share of the global electric vehicle market fell from 29% to 11% year over year.
Tudor Pickering downgraded Tesla stock to Sell and set a price target of $537 per share. This new price target is down from the previous target of $819 per share. The new target implies a further decline of 28% from where the stock closed yesterday. The firm believes that Tesla’s declining market share and profitability issues are significant problems that the company will not be able to address in the near future.
Tesla’s stock price dropped 9.04% to close at $703.80 on April 20th, following Tudor Pickering’s report. This is the lowest level that Tesla’s stock has reached since December 2020.
Tesla’s shares have been on a rollercoaster ride in recent months. After reaching a high of $883 per share in January, the stock dropped to $563 per share in March, only to rebound to $780 per share in early April. The stock’s volatility is not unexpected, given the highly competitive and rapidly changing electric vehicle industry.
Conclusion:
Tesla’s first-quarter financial results were worse than expected, resulting in a downgrade from Tudor Pickering. The firm downgraded Tesla stock to Sell from Hold, citing declining margins due to price cuts. The report also noted that Tesla’s global electric vehicle market share fell from 29% to 11% year over year. As a result of the downgrade, Tesla’s stock price fell more than 9%. The automaker’s stock has been volatile in recent months, reflecting the rapidly changing electric vehicle industry’s competitiveness.
