Deutsche Bank analyst Edison Yu has revised the price target for Tesla (TSLA, Financial), highlighting the company's delivery challenges for the first quarter. Although Yu has adjusted the target price from $420 to $345, he maintains a "buy" rating, suggesting a potential upside of 26% from Tesla's recent closing price.
Yu predicts that Tesla's first-quarter deliveries will range between 340,000 to 350,000 vehicles, which is below the market's expectation of 378,000 units. This projection represents an 11% decline year-over-year and a 30% decrease quarter-over-quarter, marking it as the lowest delivery volume since the third quarter of 2022.
Moreover, Yu notes the damage to Tesla's brand from the political activities of its founder, Elon Musk, and will continue to monitor the situation closely. Despite these challenges, Yu highlights Tesla's strategic advantage in mitigating the impact of the U.S. government's 25% tariff on non-U.S.-made automobiles. While Tesla imports components from Mexico, they mainly involve low value-added products, minimizing the tariff's overall impact.
