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Mizuho Securities analysts maintained a ‘Buy’ recommendation on Tesla (NASDAQ:TSLA), but lowered their Price Target on shares to $250 from $285 citing the worsening macro environment with ‘headwinds to the consumer and discretionary spending.’
In their latest note on the company, the analysts point out two factors that in their view contributed to the weakness in TSLA shares through much of 2022:
1. ‘A weak macro with stressed consumer, rising rates, declining affordability, and slowing auto sales.’
2. ‘A Twitter deleveraging with CEO Musk’s stock sales was an overhang.’
While the latter appears to be ‘in the rear-view now’, the analysts see the general economic uncertainty as “challenging for TSLA” and see concerns “around a weakening consumer driven by rising interest rates and broader macro concerns which could continue to be a 1H23E headwind.”
They maintain a positive long-term view of the company, noting that Tesla is “a long-term global EV leader with vertical integration, strong profit margins versus newer EV incumbent”, but lower the Price Target on shares to $250 from $285 to account for macro challenges.
Shares of TSLA are trading slightly higher in pre-market, after gaining over 5% in the prior session. The stock lost nearly 70% of its value in 2022, battered by the global economic uncertainty and controversial moves by the company’s CEO Elon Musk.
