Barclays sharply cut its price target on Tesla on Friday, just days ahead of the electric carmaker’s first-quarter earnings report.
The firm reduced its target to $275.00 (from $325.00) citing a “confusing set-up” in the first three months of the year with “weak fundamentals.” Tesla shares closed at $241 on Thursday, indicating that Barclays’ revised price target suggests an upside of roughly 14%.
However, and while maintaining a Equalweight rating, Barclays says Tesla “could see a positive reaction on better narrative” naming a “more engaged” chief executive Elon Musk plus the Robotaxi event expected for June as recently confirmed by the CEO.
Tesla delivered 336,700 vehicles in the first quarter, down 12.9% from the same period last year. Production also fell 16% to just over 360,000 units, as the EV maker shifted to the production of its refreshed Model Y.
The firm reduced also annual volume guidance expecting sales to decline this year.
In a new research note, Barclays analyst Dan Levy named three major key takes ahead of the earnings results scheduled for next Tuesday, April 22.
“Key takes: 1. Confusing set-up on 1Q with weak fundamentals, but could see positive reaction on better narrative (more engaged Elon, FSD event); 2. Expecting trough gross margin driven by volume decline, production inefficiencies; 3. Question ahead on volume – we now expect ’25 volume decline.”
The “good narrative could outweigh weak fundamentals,” Barclays said later in the note.
Ahead of the earnings results, Tesla used Say Technologies platform to garner questions from retail and institutional shareholders. As of Friday, over 2,580 questions were submitted with the most voted ones focusing on the robotaxi, the unboxed method for the model, and progress on the Full Self-Driving (FSD) software.
Earlier in the week, also Piper Sandler analyst Alexander Potter reduced the price target on Tesla by 11% to 400$, while maintaining an ‘Overweight’ rating on its stock.
The firm expects underwhelming results in the first quarter, amid a lack of details on upcoming cheaper models. However, “major catalysts” like the robotaxi are likely to change the scenario.
