Local time on Wednesday (March 13), Tesla shares fell 4.54% to 169.$48, hitting a new low in 2024 and a low since May 2023。

A "growth company without growth"

On Wednesday, Wells Fargo analyst Collin Langan announced a downgrade of Tesla's stock to "underweight" from "flat."。The bank's underweight rating is equivalent to a sell rating.。In addition, Langan has slashed its price target, from $200 per share to $125, a drop of nearly 40 percent.。The latest price target implies a 30% downside risk to Tesla's current share price.。

The downgrade and lower price target came as the bank's team of analysts expressed concern about Tesla's recent price cuts and potential slowdown in electric vehicle deliveries, which they believe will lead to further losses for the company.。

In the first two months of this year, Tesla's disappointing data in China and Europe, coupled with production disruptions at a plant near Berlin, Germany, are signaling that Tesla's deliveries in the first quarter of this year will be lower than analysts' average expectations.。According to Langan, Tesla's sales are likely to show zero growth this year, and the situation will be worse in 2025, and sales may decline.。

Moreover, the effect of Musk's previously proposed "lower prices to stimulate demand" strategy is also diminishing marginally.。In a note to clients, Langan wrote that Tesla is now a "growth company without growth."。He stressed that Tesla's sales in the second half of 2023 were up only 3 percent from the first half, while prices fell 5 percent.。This does not bode well for the level of profitability of the company。Langan lifts Tesla's 2024 profit forecast from 2.$40 down to $2 per share。

In addition, Langan also believes that the economics of Tesla's next-generation car (currently called Model 2) as a mass-market compact car "may be difficult."。

From "market darling" to "bleak"

Last year, Tesla's stock price all the way up, the whole year rose about 130%, once became the capital market "darling"。In particular, in September last year, Morgan Stanley issued a research report strongly bullish on Tesla and raised its price target by nearly 60% from the previous $250 to $400.。This research report also caused Tesla's market value to soar by nearly 80 billion US dollars overnight.。

But as time came to October 2023, Tesla's negative factors began to emerge intensively。

In its third-quarter earnings report, which was disclosed in October last year, Tesla's revenue and earnings fell short of market expectations, and Musk's first warning that demand for electric vehicles is slowing has raised concerns about the company's growth prospects.。

By January of this year, Tesla once again came up with a fourth-quarter earnings report that was lower than market expectations, which accelerated the deterioration of market sentiment.。In the earnings report, Tesla said that Tesla's revenue in the fourth quarter increased by 3% year-on-year, the slowest growth rate for Tesla in more than three years.。Gross margin fell further to 17..6%, the lowest level since 2019。In addition, Tesla did not announce its 2024 delivery target in its earnings report, nor did it give gross margin guidance.。

Subsequently, Musk hopes to gain at least 25% voting control of the company, the U.S. car rental giant Hertz plans to "sell" Tesla, Germany Berlin plant shutdown and other news continue to hit market sentiment, Tesla's share price has also been down.。

Tesla's stock price has fallen by more than 30 percent this year, wiping out about $245 billion in market capitalization, falling directly out of the top 10 U.S. stock market values。Musk has also lost his title as the "richest man in the world," and he is now in third place, behind LVMH Group Chairman Bernard Arnault and Amazon founder and current chairman Jeff Bezos.。

Despite the decline, Tesla's stock is still trading at about 55 times its expected price-to-earnings ratio, while the average price-to-return index of the U.S. stock "Big Seven" is trading at about 31 times.。

Adam Sarhan, founder and CEO of 50 Park Investments, said: "Right now, the market is voting and telling us that Tesla is not worth such a high valuation at this time.。"Right now, sellers are dominant and the market needs a bullish catalyst to get excited."。"

David Wagner, investment manager at Aptus Capital Advisors, said: "For a long time, Tesla has been working on one of the most popular topics in the market, namely the electrification of global cars.。But now, the market's favorite topic is artificial intelligence, and ESG (environmental, social and corporate governance) has taken a back seat, so the historical valuation premium (for Tesla) may no longer be guaranteed, especially with its future revenue growth and slowing margins.。"

Tesla bullish sentiment remains

U.S. investment bank Wedbush Securities analyst Dan Ives maintained his "overweight" rating on Tesla on Wednesday and set a price target of $315 for the company, significantly higher than Tesla's current share price.。

The long-time Tesla bully expects Tesla to deliver about 430,000 vehicles in the first quarter, down from Wall Street's consensus estimate of 487,000 vehicles.。But Ives believes that throughout the year, he is more optimistic about Tesla's delivery data and expects deliveries to continue to rise。

Ives said he had just returned from a trip to Asia and in his view the price war in China was brutal。But at the same time, he gets a sense from industry surveys in China and the region that the price cuts for many electric cars could start to fade by the spring / summer of 2024, which is good news for Tesla and the electric car industry.。He believes that Tesla is still on track to exceed 2 million vehicles in 2024。

Ives wrote in the report: "We believe that the negative impact of Tesla's stock price is excessive.。Because by the end of 2024, Tesla's demand will stabilize, price cuts will also moderate, and battery costs / production will show strong cost-effectiveness。The Model 2 (which sells for less than $30,000) will also be available next year.。"

Ives noted that despite all the recent bad news from Tesla, he and his team still believe that "as Tesla makes significant progress in artificial intelligence and autonomous driving, the risks / rewards of Tesla are extremely attractive at these levels, and we believe that as the next chapter of Tesla's growth story unfolds in real time, Tesla's valuation may exceed $1 trillion。"

At the end of the report, Ives wrote: "Global demand for electric vehicles has slowed significantly, but we believe Tesla will continue to grow and improve margins in the coming quarters.。Now is not the time to give up Tesla..Despite the clouds, we have high confidence in Tesla's current share price。"