Wells Fargo Reaffirms Underweight on Tesla (TSLA) Amid Sharp Delivery Declines

Tesla Inc. (NASDAQ:TSLA) is among the most fantastic stocks every investor should pay attention to. With its innovations in electric vehicles and autonomous driving technology, the company remains a leader in this industry. However, demand headwinds and rising competition seem to be weighing on its outlook, as evidenced by the subdued price targets and cautious ratings from many analysts in recent weeks.

Among the analysts who foresee a sharp downside in Tesla shares is Wells Fargo’s Colin Langan, who reaffirmed his Underweight rating and $120 price target on November 10, as reported by TheFly. Langan’s analysis suggests that deliveries are seeing a “widespread weakness” across the U.S., EU, South Korea, and China, the four markets he tracks. The trends are relatively better in the U.S. than in other markets. He emphasized that October deliveries are down roughly 23% year-over-year and 54% month-over-month, with year-to-date volumes lower by about 9%.

That said, the recent approval of a $ 1 trillion “stock award” pay package for CEO Elon Musk may prove to be a shot in the arm for Tesla. Musk has been given new targets to meet in order to earn that package. He will receive the first part of the stock when Tesla Inc. (NASDAQ:TSLA) reaches a market capitalization of $2 trillion. After achieving the other interim goals, he will receive the complete package if the company reaches a market capitalization of $8.5 trillion. The company also needs to achieve operational milestones, such as vehicles delivered and EBITDA targets, for this to materialize.

In an interview with Bloomberg on November 7, Dan Ives, Head of Research at Wedbush Securities, expressed optimism about Tesla Inc. (NASDAQ:TSLA) achieving such targets. Ives stated:

“This is the most important chapter in the history of Tesla.” He added, “I believe, it’s all on the table. I mean, these are not the targets that are just ridiculous. Obviously, extremely optimistic. But I think Tesla is going to be able to get there as they execute.”

Tesla Inc. (NASDAQ:TSLA) is an EV manufacturer and clean energy company known for its innovative solutions to sustainable transportation and energy solutions.

While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.