A second analyst covering Tesla Inc. is bracing for vehicle sales to drop this year, rather than rebound from the first annual decline in more than a decade.
Chris McNally at Evercore ISI cut his full-year estimate for vehicle deliveries to 1.75 million, from 1.88 million, in a report published Wednesday. The revision follows UBS Group AG’s Joseph Spak slashing his projection to 1.7 million on Monday, which contributed to Tesla shares having their worst day since September 2020.
McNally, who has the equivalent of a hold rating on Tesla’s stock, said the company is seeing brand and volume “destruction” around the globe. He also wrote that investors increasingly doubt Tesla will soon expand its lineup, and instead suspect the new, more affordable vehicles vaguely teased for the first half of this year will only be a cheaper, de-contented variant of the Model Y.
McNally cut his share-price target to $235, from $270, citing the risks to Tesla’s sales as well as to the company’s autonomous vehicle hopes. A website that crowd-sources data on how often Tesla owners have to intervene while using the driver-assist system marketed as Full Self-Driving has seen “little improvement,” he said, despite the latest-version software update having fully rolled out.
Tesla’s stock has been the worst performer on the S&P 500 Index, plunging 43% so far this year. The shares traded up 3.4% to $238.38 as of 6 a.m. Wednesday in New York.