MW Tesla faces 'slower growth and rising risk' among increasing reasons to worry

By Claudia Assis

BofA Securities has cut its price target on Tesla's stock, which is trading at a four-month low

Tesla Inc.'s stock is hovering at a four-month low and testing new depths on Tuesday after analysts at BofA Securities slashed their price target on the stock and gave investors a fresh reminder of why to worry.

The stock $(TSLA)$ has been under pressure in recent weeks as concerns mount about the involvement of Elon Musk, the company's chief executive, in politics, particularly around his efforts at the so-called Department of Government Efficiency, or DOGE, which have soured many people on the brand in the U.S., and his support of far-right causes in Europe, where Tesla sales have fallen.

BofA analysts led by John Murphy added to that the lack of news on the launch of Tesla's lower-cost electric-vehicle model, expected in the first half of the year, and the risks to its Robotaxi launch.

They also highlighted broader risks like competition from China's cheaper EVs and weaker demand for EVs in general. In the plus column, there's the potential licensing of Tesla's advanced driver-assistance systems, including its Full Self-Driving suite, and a capital raise that would help accelerate growth, they said.

The "slower growth and rising risks" led the analysts to cut their price target on the stock to $380 from $490, implying an upside of about 44% over Tuesday's price.

Tesla shares struggled to remain above $260 on Tuesday. A close around current levels would be the stock's lowest since Nov. 5, when it ended at $251.44.

The stock is down eight of the past nine days and has lost roughly a third of its value this year. It's down 45% from its Dec. 17 record closing high of $479.86.

It's faring better than the broader market, however, on a 12-month view: It's up 40%, far outpacing the S&P 500 index's SPX 12% gain in the same period.

-Claudia Assis

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March 04, 2025 12:04 ET (17:04 GMT)

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