Tesla’s stock has performed poorly among the Magnificent 7 stocks in 2025, plummeting 35% over the past month due to cooling post-election excitement and weakening fundamentals. The company’s earnings have seen all gains erased in the past six months, with shares trading at 116 times trailing twelve-month (TTM) earnings.
Analysts have lowered their price targets for Tesla, with Wells Fargo cutting its 1-year target from $135 to $130, representing a 45% drop from current prices. European sales collapsed 45% year-over-year in January and fell 41% in February, while Chinese sales dropped 14%. US sales have also weakened, and recent vandalism incidents are making people reconsider buying Tesla vehicles.
Other analysts have followed suit, including RBC, Mizuho, JPMorgan, Guggenheim, and UBS, who lowered their price targets by significant amounts. The trend of slashing targets is concerning, as all adjustments occurred since March 10.
Wells Fargo believes that Tesla’s stock remains overvalued at current prices and could fall further due to worsening fundamentals. Without positive news from the company, paying triple-digit multiples seems unwarranted in the long run. Elon Musk’s focus on other ventures, such as the Department of Government Efficiency, has raised concerns about his ability to manage the companies concurrently.
The sales collapse is extremely bearish, and margin pressures could expand further if President Trump cuts EV subsidies. Tesla reported 2.15% revenue growth in Q4 but missed estimates significantly. If current trends continue, Wells Fargo’s warnings may prove correct.
In our opinion, TSLA stock remains a “Sell” due to significant downside risk and the need for substantial growth to justify high price multiples. The mean price target of $343.67 implies 45% upside from here, but this would require a lot going right for shares over the next 12 months.
Source: https://www.barchart.com/story/news/31484029/wells-fargo-is-calling-for-tesla-stock-to-plunge-another-50-how-should-you-play-tsla-here