Tech Bull Daniel Ives Cuts Tesla Stock Price Target by $400 on ‘Hard to Ignore’ China Lockdowns By Investing.com

By Senad Karaahmetovic

Wedbush analyst Daniel Ives lowered the price target on Tesla (NASDAQ:) to $1,000.00 per share from $1,400.00 to reflect limited output during Shanghai lockdowns.

The analyst described the current Shanghai lockdowns as “an epic disaster” in Q2. Therefore, Ives expects Tesla to record “modest delivery softness this quarter with a slower growth trajectory in the key China region into the 2H.”

Moreover, the analyst also noted “a myriad of issues across the whole supply chain based on our work in China including the logistics angle once Model 3’s/Y’s are ready for shipments and deliveries.”

Ives also expects the output issues to spill over into Q3.

“While Tesla should be able to ramp aggressively into 2H within the China region on the production front, with the zero Covid policy looming there will likely be some bumps in the road over the coming months as well. The ramp of Austin and Berlin appear to be proceeding well and will be key growth drivers over the coming years as Tesla further ramps its production capability globally,” Ives told clients in a note.

The analyst also reflected on the saga centered around Tesla CEO Elon Musk and Twitter (NYSE:).

“The Twitter circus show has been a black eye for Musk and Tesla’s stock in our opinion and has turned into a life of its own which has cast a dark shadow on the name and caused many investors to exit stage left while this soap opera continues. While the Twitter situation in theory does not impact the Tesla fundamental story, the distraction risks for Musk (perception is reality) are hard to ignore at a time that the Tesla ecosystem have never needed Musk more with the worst supply chain crisis seen in modern history.”

The lowered price target reflects slashed delivery estimates – from 297k to 277k in Q2 and from 1.56 million to 1.43 million for the full year. EPS and revenue for the full year are now seen at $11.46 and $81.0 billion, respectively.

Tesla stock price is down a further 1.7% in pre-open Thursday after sliding 6.8% yesterday.