Tesla's Stock Divides Analysts: HSBC Sees 50% Drop, Wedbush Bullish

Tesla's stock price has been the subject of intense debate among analysts following a significant drop and subsequent rebound. The future trajectory of the stock has sparked divergent opinions, with some predicting a sharp decline while others foresee a substantial rise.

HSBC has lowered its target price for Tesla to $130, indicating a potential drop of over 50% from the current price. The bank cites several challenges that Tesla is facing, including reduced competitiveness of older models in the China market. This pessimistic outlook suggests that Tesla's current difficulties may persist in the near term, contributing to the bearish sentiment.

Michael Tyndall, an analyst at HSBC, wrote that the current sales slowdown was evident even before the recent brand crisis. His team's analysis indicates that Tesla's older models in the China market are losing competitiveness due to outdated driver-assistance technology, while the brand's reputation in Europe is also under threat. Tyndall warns that Tesla's unconventional strategies, such as refusing to lower prices or conduct regular model updates, have so far had limited impact but could exacerbate negative effects as competition intensifies and brand value declines.

Regarding the much-discussed Robotaxi business opportunity, Tyndall believes that the realization of this venture is too far off to salvage the current stock price. He reminds investors that Tesla has a history of product delivery delays, and industry competition is increasing daily.

In stark contrast, Dan Ives, an analyst at Wedbush Securities, maintains a "outperform" rating and a $550 target price for Tesla, even as the company prepares to release what could be disappointing first-quarter delivery data. Ives argues that despite recent challenges, Tesla's investments in autonomous driving, Full Self-Driving (FSD), and robotics are paving the way for unprecedented opportunities. He writes, "Over the past decade, we have witnessed several key turning points for Tesla. This is a crucial moment for Musk to lead the company into a new future, despite the challenges ahead."

Analyst opinions have been divided in recent reports, with four out of the last five reports taking a bearish stance. However, when considering 65 ratings in total, the overall market sentiment for Tesla remains "hold."