Tesla (TSLA) Stock Price Dropped Around 5.77% In Pre-Market Trading

Summary:

• Concerns that inflation & logistic difficulties may have slowed the EV manufacturer's development.
• Tesla fell short of automotive gross margin estimates.

Tesla share prices down

Tesla Inc. shares dropped by roughly 5% in pre-bell trading on Thursday as Wall Street analysts worried that growing inflation and logistical difficulties may have slowed the electric vehicle manufacturer's development.

At least five brokerages reduced their price targets for the stock, with Wedbush Securities making the greatest reduction of $60 to lower its goal to $300 and citing softer deliveries in 2022.

"The bullish narrative is clearly hitting a rough patch as Tesla must now prove again to the Street that the robust growth story is running into a myriad of logistics issues as opposed to demand softening," Wedbush analyst Daniel Ives wrote in a note.

In premarket trade, the stock, which has lost 37% of its value this year, dropped 4.6% to $211.80. The company warned that difficulties it was having with logistics could prevent it from meeting its goal of a 50% increase in delivery volume this year in its quarterly results report. Elon Musk, the CEO of Tesla, acknowledged that "demand is slightly harder" than it would otherwise be on a post-earnings call, but he reiterated that the business was quite optimistic in having a record fourth quarter.

Tesla fell short of automotive gross margin estimates despite increased selling prices for its vehicles due to manufacturing ramp-up costs at its new factories in Austin, Texas, and Berlin, Germany. However, other analysts believe Tesla will benefit greatly from the global transition toward electric automobiles.

Elon Musk, Tesla's CEO, noted that demand was high while discussing the company's third-quarter profits. He did, however, issue a warning that deflationary tendencies in the economy were intensifying and that China and Europe were going through "a form of recession."

✕ TSLA Price Chart

Sources: finance.yahoo.com, ft.com