As Tesla CEO Elon Musk grows further embedded in the White House, his electric vehicle company’s public perception is weighing on the stock according to polling by investment research firm Stifel, which lowered its price target for Tesla due to pushback about Musk’s key role in the administration of President Donald Trump.
Elon Musk at the site of Tesla's Germany "gigafactory" in 2020.
“The negative downturn in consumers' perception of Elon Musk…potentially results in a headwind to sales,” wrote Stifel analyst Stephen Gengaro in a Sunday note to clients.
Stifel lowered its price target for Tesla stock from $492 to $478 following the survey, maintaining a buy rating for Tesla and still indicating 33% upside from Tesla’s $360 share price Monday.
The adjustment came after a monthly survey conducted by Stifel and Morning Consult included in a Sunday note to Stifel clients revealed Tesla’s net favorability is 3%, close to the all-time low favorability dating back to the poll’s 2018 inception (net favorability compares the proportion of respondents with a positive view of Tesla minus those with a negative one).
That reflects increased skepticism about Musk’s political influence, as some consumers pull back from Tesla: A CBS News/YouGov survey released Sunday found just 23% of Americans believe Musk and his DOGE commission should have “a lot” of influence in the federal government.
And reports last week indicated a sharp drop in Tesla sales across Europe, including a near 12% January decline in the UK, a 59% January decline in Germany and a 63% January drop in France.
Shares of Tesla declined as much as 3% Monday following the Stifel report, before settling into a slimmer 0.5% daily loss by mid morning, moving against strong gains for technology stocks as the Nasdaq advanced more than 1%. Tesla notched its lowest share price since Dec. 4 on Monday. That extends Tesla’s year-to-date loss to 11%, as shares trade 26% below the all-time high set in December.
Musk’s net worth was $396 billion Monday, according to Forbes’ calculations. Though that’s still the most of any human, and more than $140 billion more than the next-richest person, Facebook cofounder Mark Zuckerberg, it’s a $58 billion decline from his record end-of-day net worth of $454.5 billion achieved Dec. 16.
Tesla reported its first year-over-year vehicle delivery decline on record last year, as its electric vehicle deliveries inched down from 2023’s 1.81 million to 1.79 million. The company’s financial performance was also down, as its below-expectations earnings report last month revealed Tesla’s profits declined more than 20% from 2023 to 2024. And yet, Tesla stock is up more than 90% over the last year, including a 43% gain since the November election. Tesla stock has “become completely divorced from the fundamentals,” skeptical JPMorgan analysts led by Ryan Brinkman remarked last month. To Brinkman’s point, Tesla’s price-to-earnings ratio, a commonly cited valuation metric comparing a firm’s market value to its profits over the last 12 months, is about 175, about seven times the median S&P 500’s company’s 24 price-to-earnings ratio.
Even Musk admits the tangible slowdown in Tesla’s core electric vehicle business, describing it last January as a bump between “two major growth waves.” Instead, the bullish thesis on Tesla rests largely on its prospects outside of merely selling its electric cars, including its leading efforts in applied artificial intelligence and its Full Self-Driving initiative. Stifel says Tesla’s AI efforts are “critical to the story” of Tesla stock, which it still holds a buy rating for, while Musk said last month he sees a $10 trillion market for the company’s Optimus humanoid robots.
“If you buy the stock, you have to accept that it’s not going to be like a regular company. It's Elon’s private company that is public for some reason,” Ross Gerber, CEO of the asset manager Gerber Kawasaki with a $100 million stake in Tesla, told Forbes.