Tesla shares are set for their worst weekly performance since the election, down 7.5% due to poor global sales, especially in key markets like Germany, France, the UK, and China. This decline follows a 22% drop from its December 2020 peak, amid concerns connecting Elon Musk’s political affiliations to weakening sales. Market experts advise caution, suggesting potential buying opportunities may emerge in the coming weeks.
Tesla Inc. is experiencing significant declines in its stock market performance, with shares plummeting 7.5% this week, marking the worst weekly decline since the presidential election. The downturn is attributed to disappointing global sales, particularly in key markets like Germany, France, and the UK, where sales have hit their lowest levels in over two years. Additionally, sales in China fell 11.5% year-over-year, compounding troubles as rival BYD Co. celebrated a strong week due to new technology updates.
These declines have resulted in Tesla’s stock value falling 22% since reaching a record high on December 17, 2020. Elon Musk’s increasing political polarisation, particularly his association with former President Donald Trump, may also be affecting Tesla’s market performance. Observers note that Musk’s recent political moves and controversies might have discouraged sales in Europe amid rising tensions surrounding tariffs and international trade policies.
Market experts speculate that Musk’s political ties might be weighing heavily on Tesla. Analyst Mike O’Rourke remarked that the car manufacturer could be suffering from a backlash against Musk’s close alignment with Trump. Conversely, some investors remain optimistic, believing that Musk’s connections could facilitate favorable regulations for Tesla’s ambitions in autonomous vehicle development.
Currently, Tesla holds the position of the poorest performer in the prestigious Bloomberg Magnificent Seven Index, which tracks leading tech stocks. With a valuation considerably higher than its peers, Tesla faces scrutiny over its investment attractiveness, prompting experts to advise potential investors to exercise caution at this time. Some predict that Tesla may reach bottom prices in the next few weeks, suggesting a buying opportunity at even lower prices.
Opinions on Tesla shares among Wall Street analysts are varied; approximately half maintain a buy-equivalent rating while the other half advise holding or selling. The average price target for the next twelve months stands at around $360, reflecting the mixed outlook on the company’s performance going forward.
Tesla Inc., founded by Elon Musk, is a prominent player in the electric vehicle market. Current trends indicate that the company is facing a challenging phase characterized by declining sales in key international markets. With Musk’s contentious political associations affecting public perception and investor confidence, the company’s stock performance has notably suffered. The broader market trend this year has led to Tesla being flagged as a major laggard among valuable technology companies, highlighting industry volatility and shifting investor sentiment.
Tesla’s recent struggles underscore a confluence of disappointing sales and political dynamics impacting investor confidence. With shares declining sharply amid broader industry challenges, analysts remain divided on the stock’s future prospects. The outlook will hinge on both market recovery and Tesla’s ability to navigate its political climate effectively, raising questions on potential buying opportunities amid the current downturn.
Original Source: financialpost.com
