“Investors Growing Tired of Elon”: Cowen Sees Q2 Risk for Tesla on China Problems, Takes a “Pause from Recommending Stock”
Cowen analyst Jeffrey Osborne lowered Tesla’s (NASDAQ: TSLA) price target from $790.00 per share to $700.00 per share to reflect lower delivery estimates because of problems in China.
Cowen now expects 1.28 million cars to be sold this year, instead of 1.35 million as it did before. For Q2, Osborne predicts that 242,000 EVs will be delivered, which is less than the 309,400 he predicted before.
“We think most investors expect Tesla’s working capital and production results for the second quarter to be very bad, and our talks with investors suggest that buy-side expectations are between 240 and 250k deliveries. We know that China is Tesla’s most profitable location, so the loss of 50–60k vehicles will also hurt profitability. This will be made worse by problems getting the Model Y off the ground in Berlin and Austin. Berlin started making cars in May, and Osborne wrote in a client memo that he thought a few thousand Performance Model Y cars would be sent to Germany, Norway, and Sweden, among other places.
The analyst also says that Elon Musk and Co. may have trouble meeting their goal of a 50% increase in deliveries by 2022. This would probably hurt the price of Tesla’s stock.
Osborne also said that investors are “getting tired of Elon” because of his recent tweets about ESG, politics, Twitter, remote work, and other things. Osborne said that some of them have reached “peak Elon.”
“These distractions are making it harder for the media to cover Elon and, by extension, Tesla, which we think is a problem for a company that doesn’t advertise,” said the analyst.
As a result, Cowen has “paused” recommending Tesla stock to investors because of the above issues, as well as the fact that other companies are starting to use FSD.
The price of Tesla stock is down more than 4 percent before the market opens on Friday. This is because Reuters said the electric vehicle (EV) company is cutting 10 percent of its staff and stopping hiring.
