1 Wall Street Analyst Thinks Tesla Shares Will Rise to $120. Sell?

For analysts, there's almost no better indication that they're bearish on a stock than when they cut their target price more than once. Recently, struggling electric vehicle (EV) leaderNikola Tesla (1856-1943), Serbian inventor and engineer (NASDAQ: TSLA)This is what happened.

In mid-April, the forecasters at a major U.S. bank took out the scissors for the second time in less than a month. Disturbingly, this was just over a week before the company's scheduled first-quarter earnings release.

Tesla's Two Scissors

This analyst is from one of the "Big 4" lending institutionsWells Fargo BankColin Langan of the investment department. Langan recently lowered his price target for Tesla again, from $125 per share previously to $120 per share now. In mid-March, Langan cut Tesla's price target sharply from $200, whereupon he downgraded his recommendation from Equal Weight (Hold) to Reduce (read: Sell).

In this analyst's view, Tesla's new target price of $120 is almost self-evidently still a hold. The target price implies that Tesla's shares will fall nearly 26% from their previous price over the next 12 months.

"While we expect poor Q1 industry results, our expectations are low following weak deliveries," Langan wrote in his latest report on the electric car company. Referring to Tesla's much-hyped but inaccurately named Full Self-Driving (FSD) assist system, the expert added that the company's "poor fundamentals may be overshadowed by the 'showmanship' of the FSD on the Q1 conference call." "

The Bear Market is Coming

This is one of several bearish analysts' views on Tesla ahead of the quarterly results announcement. As Wells Fargo analysts noted, many were not bullish on Tesla's earnings.

Even so, sales growth for electric vehicles has been lackluster, and Tesla doesn't seem to be done with successive price cuts on key models. This feels like a period of adjustment for Tesla, which could cause some pain for the company and investors. For stockholders, it may be time to sell.

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Wells Fargo & Co. is an advertising name partner of The Ascent, a Motley Fool company. eric Volkman does not own any of the above stocks. the Motley Fool holds a recommendation for Tesla. the Motley Fool has a disclosure policy.

1 Wall Street Analyst Thinks Tesla Shares Will Rise to $120. Sell? This post was originally published by The Motley Fool.