A Price Target Cut for Tesla is Given by Barclays Ahead of This Week's Earnings

Barclays is approaching Tesla with caution ahead of the electric vehicle maker’s upcoming first-quarter earnings report. The bank lowered its price target for Tesla stock, trimming it from $325 to $275. Despite this downgrade, the new target still suggests a possible upside of about 13.9% from Thursday’s market close. U.S. stock markets were closed on Friday in observance of Good Friday.

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Barclays analyst Dan Levy maintained an "equal weight" rating on Tesla shares, signaling a neutral stance. He described the outlook for Tesla going into the Q1 earnings as “confusing,” but added that there’s still a chance for the stock to perform better than expected. “While there are signs of weakness in the company’s fundamentals, we think a strong narrative could still lift the stock,” Levy stated.

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According to Levy, Tesla is currently dealing with mounting concerns regarding its financial performance. One of the key issues is that its auto margins, excluding regulatory credits, are expected to reach a record low in the first quarter. Additionally, Tesla has seen a slow start to its 2025 sales volume, and Levy believes this sluggish momentum could make it even more difficult for the company to grow its delivery numbers next year.

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Still, he acknowledged that sometimes investor sentiment can override weak financials, especially if Tesla presents a compelling vision or strategy. One potential catalyst could be if CEO Elon Musk shifts his public image by taking a step back from his political engagements and recommitting his focus to the company. Levy believes such a move would resonate positively with investors.

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“This would be especially impactful given how much of the Tesla investment story depends on its future in artificial intelligence, self-driving technology, and robotics — all of which are closely tied to Elon Musk himself,” Levy noted.

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Musk’s political involvement, particularly his association with former President Donald Trump’s administration, has sparked controversy around the world. In some regions, it has even led to protests and boycotts of Tesla vehicles. A change in Musk’s public stance could therefore help improve public perception and investor confidence.

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Another potential positive development on the horizon is Tesla’s upcoming Full Self Driving (FSD) event, scheduled for June. Although the monetization of Tesla’s autonomous driving technology remains uncertain, the event is likely to generate buzz and excitement, according to Levy. Even if financial returns from FSD are still distant, strong investor interest in the technology could lift Tesla’s stock in the near term.

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Levy also pointed out that any updates related to the production of Tesla’s anticipated affordable vehicle, referred to as the Model 2.5, might provide additional momentum for the stock. However, he cautioned that global trade policies — particularly tariffs — could significantly affect Tesla’s strategy around launching a lower-cost model. “It’s crucial to consider how tariff changes may influence Tesla’s roll-out of its new entry-level car,” he said.

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So far this year, Tesla’s stock performance has been underwhelming. The shares have declined by 40.2%, making it one of the more heavily pressured large-cap stocks in the market. On Monday morning, the stock dropped another 3.5% in premarket trading, signaling continued investor wariness ahead of the earnings announcement.

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Tesla is expected to release its quarterly financial results after the market closes on Tuesday. With investor sentiment already fragile, the report could play a significant role in shaping the company’s short-term stock trajectory. Analysts and shareholders alike will be watching closely for any signs of turnaround — whether through improved financial metrics, bold new product plans, or a shift in Musk’s leadership focus.

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In summary, Barclays is signaling a mixed outlook on Tesla: While there are valid concerns about declining margins and soft delivery forecasts, certain non-financial factors — such as Musk’s public persona, upcoming events, and innovation potential — may still offer support to the stock. Levy’s report underscores how Tesla continues to be a company where narrative and perception often weigh just as heavily as traditional fundamentals in determining its market performance.

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