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Update: Wedbush Cuts Tesla's Price Target to $1,000 From $1,400, Amid 'Softness in China, Ongoing Supply Issues;' Outperform Rating Kept

9:02AM ET 5/19/2022 MT Newswires
(Updated to add analyst commentary)

Wedbush lowered its price target on Tesla (TSLA) to $1,000 from $1,400, citing "softness in China and ongoing supply issues."

Electric vehicle supply and demand in China "are the linchpins to our long term bull thesis," analyst Daniel Ives said in a note to clients; however, "the current Shanghai lockdowns have been an epic disaster so far ... and we expect Tesla to see modest delivery softness this quarter with a slower growth trajectory in the key China region into the [second half]." Ives also anticipates "weak China sales this quarter with some spillover into [the third quarter]."

Accordingly, Wedbush has lowered its Q2, FY22, and FY23 estimates to reflect softness in China with Q2 total deliveries down to 277K from the original estimate of 297K. Wedbush anticipates total revenue for the same quarter to be $15.9 billion from the original $16.9 billion estimate.

Ives additionally commented that "the Twitter circus show" has "caused many investors to exit stage left." Though the potential acquisition of the social media platform "does not impact the Tesla fundamental story, the distraction risks for Musk (perception is reality) are hard to ignore at a time that the Tesla ecosystem have never needed Musk more with the worst supply chain crisis seen in modern history."

Wedbush reiterated its outperform rating on Tesla. The stock has an average rating of outperform and price targets ranging from $250 to $1,620, according to analysts polled by Capital IQ.

Tesla was down approximately 1.5% in Thursday premarket trading.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

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