Why Shares of Tesla Are Falling to End the Week

Core Viewpoint - Tesla's stock is experiencing downward pressure due to inflation concerns and a lowered price target from an analyst, indicating potential challenges ahead for the company [1][2][3]. Group 1: Inflation Impact - The Personal Consumption Expenditures index rose by 0.4% month-over-month and 2.8% year-over-year, slightly above estimates, contributing to inflationary concerns that affected the broader market [2]. - The overall market struggled as a result of this inflation data, leading to declines in most stocks, including Tesla [2]. Group 2: Analyst Report - Deutsche Bank analyst Edison Yu maintained a buy rating on Tesla but reduced the price target from $420 to$355 [3]. - Yu revised first-quarter delivery estimates for Tesla from 378,000 to a range of 340,000 to 350,000, indicating an 11% year-over-year decline and the lowest deliveries since 2022 [3][4]. - Full-year delivery estimates were also lowered to 1.7 million, reflecting a 5% decline year-over-year, primarily due to weakness in Europe and changes related to the Model Y Juniper [4]. Group 3: Market Sentiment and Future Outlook - Despite the weak delivery outlook, some analysts remain optimistic about Tesla's future, citing potential launches of robotaxis and household robots [5]. - The upcoming first-quarter earnings report in late April will be crucial for assessing delivery trends, which could significantly impact the stock price [5]. - Tesla's current trading at approximately 100 times forward earnings suggests an unfavorable risk-reward ratio, leading to a cautious stance among some analysts [5].