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Despite news hitting the wires of Elon Musk’s potential separation from the US government, Tesla’s stock received back-to-back target cut earlier today. The shares have close to 5% today after a report from Politico claimed that Musk would leave soon, with the White House casting doubt on the report. Today’s share price bump comes despite Tesla’s Q1 vehicle deliveries sitting at 336,681 and widely missing analyst estimates of 377,000.
Yet, the shares have gained as investors bet on Musk giving more time to his car company and potentially reversing its ill fortune. However, analysts from CFRA and Truist have cut Tesla’s share price target, while Wedbush analyst Dan Ives has lambasted the firm’s Q1 performance. Musk joined the White House in denying Politico’s report and termed it fake news.
Tesla Continues To Witness Analyst Bearishness Despite Rumors Of Musk Leaving His Government Role
A couple of hours after White House Press Secretary Karoline Leavitt termed Politco’s report as “garbage,” Musk joined her on his social media platform in concurrence. The Tesla, SpaceX and xAI billionaire termed Politico’s scoop as “fake news” before Tesla’s shares closed the day’s trading 5.3% higher.
Yet, even though the stock reacted positively to his potential government departure, its share price target was cut by two analysts earlier in the day. Analysts from CFRA and Truist kept the bearish tone on Tesla’s stock. They cut the price target to $360 and $280, respectively. CFRA’s Q1 Tesla delivery estimate of 360,000 was lower than Wall Street’s 377,000 estimate but Tesla still fell short. The firm lowered its 2025 and 2026 EPS estimates to $2.45 and $3.60 based on lower vehicle delivery estimates.
However, CFRA kept an optimistic tone about Tesla as it not only noted that “Auto volumes were negatively impacted by the changeover of Model Y lines across all four factories, leading to several weeks of lost production,” but added that “we continue to expect a strong sequential rebound in auto volumes starting this quarter.”
While CFRA was optimistic about Tesla’s Q2 vehicle deliveries, Truist urges investors to focus on the firm’s assisted driving platform, FSD. The bank outlines that Tesla’s future FSD updates “are much more important for the long-term value of the stock” but adds that the delivery drop has forced it to reduce EPS estimates and the price target.
Truist has a Hold rating on Tesla’s shares while CFRA has stuck with its Buy rating despite the target cut.
Wedbush’s Dan Ives, who is one of Tesla’s biggest cheerleaders, maintains his Outperform rating and a $550 share price target. However, Ives believes that Tesla’s Q1 “was even worse than expected.” He doesn’t mince words for Musk’s association with the US government and claims that “[t]he more political he gets with DOGE the more the brand suffers, there is no debate.”
Musk has to balance his role as Tesla’s CEO with his government responsilbities, Ives adds. The weak Q1 performance forces the Wedbush analyst to call the results “a disaster on every metric” which is “a moment of truth for Musk to navigate this brand tornado crisis moment and get onto the other side of this dark chapter for Tesla with much better days ahead.”
Tesla’s shares reversed course in aftermarket trading and dipped by 3.5% after Musk’s comments made rounds.
