Tesla (TSLA) has by far been the worst performer among the Magnificent 7 stocks in 2025. The stock has plunged 35% in the past month as post-election excitement is cooling down significantly and its fundamentals take a hit.
TSLA stock has erased all its gains in the past six months. Not only that, Tesla still trades at 116 times TTM earnings. With worsening fundamentals, many experts think shares can drop a lot lower. Wells Fargo analysts are on that list.
Wells Fargo Cuts Tesla’s Price Target
Wells Fargo lowered its 1-year price target for TSLA from $135 to $130. This implies a drop of around 45% from Tesla’s current price. The stock is down over 50% from its 3-month peak of $465.33.
This is because Tesla’s fundamentals have been weakening quickly. European sales collapsed 45% year-over-year in January and fell 41% in February if you look at the top nine markets. China sales also dropped 14%, and even U.S. sales have weakened. New data from S&P Mobility showed registration for Tesla vehicles fell 11% in January.
And recent vandalism is making many people reconsider buying a Tesla vehicle.
More Analysts Have Lowered Their Price Targets
Although many analysts have price targets on TSLA stock that still imply significant upside potential, the recent trend shows analysts slashing targets.
For example, RBC lowered its price target from $440 to $320. Mizuho lowered from $515 to $430, JPM lowered from $135 to $120, Guggenheim lowered from $175 to $170, and UBS lowered from $259 to $225.
What’s concerning is that all these price target adjustments have happened since March 10.
Could Wells Fargo Be Right?
Wells Fargo shares my view that TSLA stock remains overvalued at current prices and could fall further. Paying triple-digit multiples for a company with worsening fundamentals is not wise in the long run.
There has been no positive news coming out of Tesla recently, except that California could allow it to offer ride-hailing services.
The sales collapse is extremely bearish. Elon Musk seems preoccupied with the Department of Government Efficiency instead of focusing on Tesla or SpaceX. In fact, he said he had “great difficulty” running his companies concurrently with DOGE. Plus, margin pressures could expand even more if President Donald Trump cuts EV subsidies, as he promised to during his campaign. Even if he does not, higher margins only warrant a big premium if it comes with good enough growth. Tesla reported just 2.15% revenue growth in Q4 and missed estimates significantly.
If current trends continue, Wells Fargo could indeed be right.
How You Should Play Tesla Here
In my opinion, TSLA stock is still a “Sell.” The stock has only reverted to pre-election prices, and there’s a lot more downside risk. Elon Musk is only becoming more controversial and has politicized the brand.
The mean price target of $343.67 implies 45% upside from here. In my opinion, a lot would have to go right for shares to reach this target over the next 12 months.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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