According to China Central Television (CCTV), on April 6 local time, a Wall Street analyst who has been a staunch bull on the stock of U.S. automaker Tesla predicted that due to the impact of U.S. government trade policies, Tesla’s stock still has a potential downside of 43%.
According to Bloomberg News, Wedbush Securities analyst Daniel Ives wrote in a client report that “Tesla has effectively become a political symbol on the global stage.” He added that Tesla CEO Elon Musk should step up and act wisely during this period of uncertainty. For the past four years, Ives has consistently given Tesla a “buy” rating.
Ives lowered his price target for Tesla from $550 to $315 per share. Among the 72 analysts tracked by Bloomberg, $315 is the second-highest price target.
On March 26, Musk stated that former President Trump’s auto tariff policy would have a “significant” impact on Tesla. Musk noted that it would affect the cost of Tesla vehicle components sourced from other countries.
Tesla Stock Has Dropped 50%
Tesla’s stock price has been on a downward trend, falling 50% since reaching an all-time high on December 17 last year.
Tesla isn’t the only company experiencing stock declines. According to Yahoo Finance on April 6, the S&P 500 index — which includes Tesla as a component stock — experienced its worst week since March 2020 after the U.S. government introduced what it called “reciprocal tariffs” earlier in the week. However, Wall Street believes the sell-off is not yet over.
U.S. Stocks Still Have “Plenty” of Downside
Stuart Kaiser, Head of U.S. Equity Strategy at Citigroup, warned clients on April 6 that U.S. stocks still have “plenty” of room to fall. In his view, corporate earnings forecasts have not yet accounted for the worst-case scenarios that could result from the new tariff policies, and current stock valuations haven’t fully reflected those risks either.
Kaiser believes analysts have not sufficiently adjusted valuations, positions, and risk pricing in response to the U.S. tariff policies, as earnings per share and growth forecasts have yet to factor in the deeper impacts of tariffs. If the U.S. officially declares an economic recession, the S&P 500 index could drop even further.
