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Tesla (TSLA) can’t catch a break, Barclays reduces price target and says ‘Model 3 demand is stagnating’

Tesla’s stock (TSLA) can’t catch a break as Wall Street firms keep releasing negative notes about the company. Barclays is piling up today with a reduction of its price target due to what they see as ‘stagnating demand’.

The automaker has seen its stock price crash in the last few months, but it’s been even more drastic over the past few weeks as Wall Street analysts have been putting pressure on Tesla,

Now it’s Barclays’ turn.

In a new note to clients this morning, analyst Brian Johnson said that he sees Tesla “stalling as a niche automaker” and he is reducing the firm’s price target from $192 to $150.

He wrote in the note:

“Model 3 demand is stagnating in the US, the company still doesn’t have a path to significant auto profitability and solar storage installations have declined sequentially over the past two quarters.”
The analyst was impressed with the recent Autonomy Day for investors and he expects them to focus on fundamentals instead:

“While Mr. Musk is pivoting to the remaining ‘hyberbull’ full robotaxi scenario, his efforts to spring excitement around Tesla’s full self-driving capabilities was broadly met with the appropriate skepticism. We expect more investors to gravitate back to Tesla’s near-term fundamentals of demand, profitability, and cash generation, areas that are now more exposed as the blue pill thesis washes away.”

Tesla’s stock (TSLA) was down 1% in pre-market trading after the note was released before erasing some of the pullback.

Brian Johnson is ranked #3,907 out of 5,167 analysts on TipRanks with a success rate of 48% and an average return of -0.8%. He has been consistently recommending to sell Tesla:

Electrek’s Take

He is not wrong about Model 3 demand stagnating, but that’s just in the US where the vehicle has been delivered for a year and a half at this point.

There are still plenty of opportunities in other markets, especially in China when Tesla will be able to lower the price with local production.

As for the focus on fundamentals instead of the autonomous driving future pitched by Elon, I have to admit that it’s probably a safer approach.

However, as previously mentioned, I expect demand for the Model 3 to keep growing overseas and that should help Tesla’s fundamentals.

Full disclosure: I’m long TSLA.

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