One of the best-known (and most optimistic) analysts covering Tesla declared the company is in “crisis” and Elon Musk, the world’s richest man and Tesla’s chief executive officer, must recommit himself to his electric vehicle firm, adding further fuel to the Wall Street pushback on Musk’s time-consuming and controversial role in the Trump administration.
President Donald Trump, right, shows off a Tesla Cybertruck last week.
The Washington Post via Getty Images
Key Takeaways
- “Musk needs to change course here…Tesla’s future depends on it,” Wedbush analyst Dan Ives wrote in a Wednesday evening note to clients.
- Musk dedicating “110%” of his time to his White House role as the head of the Department of Government Efficiency has “essentially turned Tesla into a political symbol,” which is a “bad thing,” according to Ives, alluding to the widespread protests and vandalism facing Tesla showrooms and the sharp declines in early-year Tesla sales in several regions analysts have associated with Musk’s polarizing politics.
- “I loudly urge Musk and the Board to step up, stop being silent, and help resolve this crisis forming at Tesla,” wrote Ives.
- Ives’ criticism is particularly notable considering he maintains the highest share price target for Tesla of any American analyst as its stock gets battered, according to FactSet.
- His $550 target for Tesla stock implies more than 130% upside from its $232 share price Thursday.
How Elon Musk Can Alleviate Tesla Anxiety
Musk needs to “take a step back” from DOGE, according to Ives. He laid out two primary ways Musk can alleviate the nerves of investors, by formally announcing he plans to at least “balance” his role as Tesla boss and White House advisor, and by giving long-awaited updates on Tesla’s lower-cost vehicles and its full self-driving rollout.
Big Number
52%. That’s how much Tesla shares are down from their December all-time high, shedding more than $700 billion in market value. The stock declined about 2% Thursday morning, heading toward its ninth consecutive week in the red.
Key Background
A slew of firms covering Tesla have issued negative reports on Tesla, as the likes of RBC and Mizuho dramatically lowered their price targets, while Goldman Sachs, JPMorgan and UBS all cut their vehicle delivery forecasts. “We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” JPMorgan analyst Ryan Brinkman wrote last week. After donating $288 million to pro-Trump groups and other GOP causes last year, Musk has stepped into a highly powerful role as Trump’s top lieutenant in charge of reducing the federal government footprint. Tesla investor frustrations with how Musk dedicates his time are not new, as shares of Tesla declined nearly 70% in 2022 as the market soured on Musk’s $44 billion acquisition of the social media company now known as X, though the stock later rebounded as Tesla helped lead a broader rally tied to artificial intelligence optimism.
Contra
In a rare recent positive beacon from Wall Street, Cantor Fitzgerald analysts Anand Balaji and Andres Sheppard upgraded their rating for Tesla from neutral to overweight. Balaji and Sheppard described the stock’s ongoing slump as “an attractive entry point” for investors with a longer-term horizon who can stomach volatility, naming Tesla’s forthcoming robotaxi and Optimus humanoid robots as reasons for their optimism.
Tangent
Tesla stock’s slide has become a hot-button issue among the most powerful names in U.S. politics. Former vice presidential candidate, Gov. Tim Walz, D-Minn., cheerfully said Tuesday he checks Tesla’s downward-trending share price daily, while, during a Wednesday appearance on Fox News, Commerce Secretary Howard Lutnick took the highly unusual step of recommending viewers to “buy Tesla” because it’s “unbelievable that this guy’s stock is this cheap.” The billionaire Lutnick stepped down from his posts as Cantor Fitzgerald’s chief executive officer and chairman last month following his confirmation in Trump’s cabinet.
Forbes Valuation
Musk’s $327 billion net worth is more than $100 billion than anybody else’s, according to our latest calculations. For the first time in six years, it’s Musk’s stake in the private aerospace company SpaceX, not his equity in Tesla, which is the primary driver of his fortune.
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