Tesla (NASDAQ: TSLA) stock is falling in the early trading hours on Monday as Wells Fargo and Citigroup analysts slash their price targets.
Wells Fargo analysts have maintained an Underweight rating on Tesla (TSLA) and have lowered the price target to $120.
The investment bank also anticipates Tesla to fall short of first-quarter expectations when it announces its results on April 23. Despite the anticipated miss, Wells Fargo acknowledges that expectations for Tesla’s performance are already subdued following weaker-than-expected deliveries during the quarter.
Wells Fargo stated,
“We are forecasting Q1 EPS of $0.40, below consensus of $0.54.”
The bank further explained that its earnings per share (EPS) are below consensus due to price cuts, decreased deliveries, increased labor costs, and poor operational leverage. They have also reduced their full-year EPS by 20% to account for the slow pace of deliveries in the first quarter.
Meanwhile, Citigroup has maintained a Neutral rating on Tesla stock and has cut its target to $180 from $196 per share.
Tesla Slashes FSD Subscription Prices
In addition, Tesla has reduced the prices of its Full Self-Driving (FSD) subscriptions in the United States and Canada. The EV giant has now priced the subscriptions at $99 per month in the U.S. and C$99 ($71.88) in Canada, reducing them from the previous subscription price of $199 per month. This move aims to stimulate the adoption of the FSD technology amid softened demand and increased price competition in the electric vehicle market.
Musk has long promoted the FSD technology as a potential cash cow for the company. However, he has failed to deliver on his promise of a fully autonomous driving experience amid stiff regulatory and legal scrutiny of Tesla’s safety and marketing.
Tesla clarifies that its FSD software does not make its vehicles autonomous and requires active driver supervision.
Last month, Tesla announced a one-month trial of driver-assist technology for current and new U.S. customers.
Tesla (NASDAQ: TSLA) Stock Price Action
TSLA stock declined 1.15% to $168.72 in the early trading hours on Monday.
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