Tesla falls after SAP snack report and Piper Sandler price target cut

(Reuters) – Tesla shares fell nearly 6% on Monday after a report showed German software company SAP will no longer buy electric cars from the U.S. automaker, and Piper Sandler cut its stock price target on lower delivery expectations this year.

Shares of the Elon Musk-led company fell 5.7% to $177.27 on Monday, the lowest level since May 2023. The stock is down 28% this year.

The decline accelerated after the company last month forecast “significantly lower” growth for deliveries in 2024, compared with a 21% increase last year.

If losses continue, the world’s most valuable automaker could lose about $34 billion in market capitalization. The stock has lost about $193 billion this year through Friday’s close.

German publication Handelsblatt said in a report that SAP will no longer purchase commercial vehicles from Tesla due to delivery delays and price fluctuations.

Still, Tesla’s shares traded at 57.75 times forward 12-month earnings estimates, compared with 24.10 and 40.97 for Meta Platforms and Amazon.com, the EV maker’s peers among the Magnificent Seven stocks.

In addition, Piper Sandler said it expects 1.93 million vehicles this year, which represents a growth rate of about 7%, well below the 50% annual long-term target that Musk set about three years ago.

“Also, due to an aging product lineup, more price reductions may be necessary,” the brokerage said, lowering its price target to $225 from $295.

Although Tesla has updated the styling and some features of the Model 3 compact sedan, CEO Elon Musk warned last year of sluggish consumer demand due to high interest rates.

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)

Read Complete News ➤

Benefits of eating guava for Americans