Tesla stock soared 22.69% during Wednesday's stock market action, marking the second-largest daily gain the stock's history, as President Donald Trump paused sweeping reciprocal tariffs. Then, early Thursday, analysts cut price targets for the EV giant.
Several firms, in investors notes on the auto sector, reduced Tesla stock price targets on Thursday, with analysts citing Trump's 25% tariff on automobile imports, which went into effect on April 3. Tariffs on certain auto parts begins on May 3.
Mizuho lowered its Tesla stock price target to 375 from 430. The firm kept an outperform rating on the shares. The analysts noted that Trump's 90-day pause on reciprocal tariffs does not apply to auto and auto parts. Mizuho analysts believe this will result in continued uncertainty and negative impacts.
Meanwhile, UBS cut its TSLA price target to 190 from 225 and has a sell rating on the shares. The analysts noted broadly Thursday that Trump's new trade policies will raise the manufacturing costs for vehicles, which will increase consumer prices and negatively affect demand.
UBS analysts also downgraded General Motors to neutral from buy on Thursday. The firm has a stock price target of 51 on GM, down from its previous 64.
Goldman Sachs also got in the action, lowering its Tesla stock price target to 260 from 275. The firm maintains a neutral rating on the shares. Goldman Sachs broadly reduced its auto industry outlook and estimates, writing Thursday it will be hard for the auto industry to fully pass on Trump tariff costs, especially with softening consumer demand more generally.
The analysts added that tariffs will be a source of downside for both automakers and suppliers, although the car manufacturers can partly mitigate tariffs with pricing, the analyst tells investors in a research note.
Goldman Sachs also downgraded Ford on Thursday to a neutral rating from a buy with a price target of 9, down from 11. The firm kept a buy rating on General Motors but lowered its price target to 63 from 73.
Tesla Stock Action
TSLA shares dropped 7.3% to 252.40, falling as low as 239.33 intraday, during Thursday's stock market action. Tesla stock soared 22.69% on Wednesday to 272.20 as the stock market appeared to cheer Trump's decision to instate a 90-day reduction in many tariffs.
Tesla stock is down 44% from its 488.54 peak on Dec. 18. But shares have held above its March lows.
Before Wednesday's jump, Tesla stock had dropped 21% across four-consecutive daily losses. From when Trump announced his auto tariffs on March 26 to Tuesday, TSLA had declined 26%.
On Sunday, Wedbush Securities Dan Ives, a longtime Tesla bull, cut his Tesla stock target price by around 40% to 315 from 550. Ives wrote that Trump's tariffs and an Elon Musk "brand crisis" have created a "perfect storm" for the EV giant.
"Tesla is less exposed to tariffs than other U.S. automakers," Ives wrote, but "there will be a clear cost impact."
The analyst added that tariff backlash is a greater concern for Tesla.
"The bigger worry in our opinion is Tesla's success in China as this key region is the linchpin to the future success of Tesla," Ives added. "The backlash from Trump tariff policies in China and Musk's association will be hard to understate and this will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng, and others."
Ives estimates that Tesla has lost or destroyed at least 10% of its future customer base and "this could be conservative." In Europe, the figure could be 20% or more "all self-inflicted by Musk."
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