One of the Biggest Tesla Bulls Now Sees the Stock Potentially Plunging by Another 40 Percent to the $100 Price Level

March 13, 2024 jasabacklink News 0

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

If you want to see Wall Street in dysfunction, look no further than Morgan Stanley’s Adam Jonas, who maintains a Tesla stock price target of $320 but now sees the EV giant’s shares potentially tagging the $100 price level.

To wit, Jonas said in today’s morning call that Tesla’s “$100 bear case” is now in play over the next few months. This would imply a downside potential of around 40 percent relative to the current price of around $171 per share.

This aligns with Wells Fargo issuing Tesla’s first “sell” rating of the year today, with the bank slashing its target on Tesla shares from $200 to $125.

Wells Fargo has noted that Tesla’s repetitive price cuts are now having a “diminishing impact” on demand, which only adds to the EV giant’s mounting pile of challenges.

On the flip side, Wedbush and Deutsche Bank do still retain lofty price targets on Tesla shares, with the former maintaining a $315 target along with an outperform rating while the latter lowering its target to a still-respectable $218 price level. Even so, Wedbush’s Dan Ives wants Tesla to rapidly agree to a new compensation package for Elon Musk that would give him a path toward a 25 percent stake in the company. Bear in mind that Musk’s 2018 package was recently voided by the Delaware Court of Chancery, prompting the mega-billionaire to move Tesla’s legal jurisdiction to Texas.

Tesla’s Troubles

As we noted recently, Tesla has been throwing everything, including the proverbial kitchen sink, at its persistent anemic demand problem. Future Fund’s Gary Black recently noted that Wall Street might already be discounting a significantly reduced Q1 delivery tally of between 425,000 and 440,000 units. What’s more, it appears increasingly likely that Tesla would struggle to deliver even 2 million vehicles for the entire 2024.

Meanwhile, the much-hyped tailwinds from the Autopilot ADAS and its FSD capabilities still remain absent from the proverbial horizon. Recently, the IIHS ranked Tesla’s FSD as “poor” along with the vast majority of such systems currently online. This comes as the third court case vis-a-vis the Autopilot is set to commence next week.

Moreover, as per a recent site visit by Evercore, Tesla is likely “years away” from ramping up the production of its new sub-$30,000 model. Finally, the Cybertruck is expected to enter volume production only in 2025.

It is hardly a surprise, therefore, that Tesla’s correlation with Bitcoin has flipped into negative territory.

And, the sub-$140 stock price territory appears increasingly likely.

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