Wells Fargo warns Tesla shares face more downside ahead
- Wells Fargo analyst Colin Langan has cut Tesla's 12-month price target nearly 4%, now at $130.
- The report cites a significant drop in Tesla's European sales amid political controversies involving CEO Elon Musk.
- Analysts predict continued challenges for Tesla, indicating a potential for further downside in stock value.
On March 14, 2025, Wells Fargo issued a report stating that Tesla Inc. is experiencing significant challenges following a drastic sell-off of its shares, which tumbled by 50% since December 2024. Analyst Colin Langan indicated that the company's future growth is uncertain, particularly in the European market. As part of his analysis, Langan lowered the twelve-month price target for Tesla shares from $135 to $130, reflecting concerns about the company’s sales and margins that have been bearish since the previous year. The report highlighted a troubling decline of over 40% in Tesla's sales in Europe year to date, which Langan identified as a critical factor contributing to the stock's current trajectory. The steep drop in vehicle registrations in various European countries has not only deterred investors but also casts doubt on Tesla's long-term growth potential in a crucial market. Additionally, recent protests and vandalism linked to CEO Elon Musk's political actions have further exacerbated investor concerns. Since Musk's involvement in the second Trump administration, particularly his support for Germany's far-right AfD party, Tesla's reputation has been heavily scrutinized. This political association has made Musk a controversial figure in Europe, leading to customer backlash and impacting Tesla's brand image. The sentiment surrounding the stock has shifted negatively, prompting a reevaluation of consensus estimates on Tesla's future profitability and stock performance. In light of these developments, Wells Fargo joined a growing number of analysts on Wall Street who have opted to adopt a revisionist stance toward Tesla. Banks such as UBS and Redburn Atlantic have similarly reiterated sell ratings in their analysis, further indicating skepticism about the electric car company's outlook. As the stock persists in a downward trend, it appears that Tesla faces a prolonged period of market pressure and uncertainty about its financial trajectory in the near future.