Tesla stock target slashed at Mizuho on continued headwinds from slowing sales

Mizuho Securities has lowered its price target on Tesla (TSLA) to $375 from $390 and cut its 2025-2026 revenue and delivery estimates, citing global sales headwinds and a softer U.S. battery electric vehicle (BEV) growth outlook, with 2025 revenue now forecast at $91 billion, below Street consensus. Despite maintaining an Outperform rating due to Tesla's U.S. EV leadership and long-term tailwinds like robotaxis, the firm highlighted risks from the phaseout of U.S. Inflation Reduction Act incentives. Concurrently, Mizuho raised its 2025 global BEV production growth estimate to 15%, driven by stronger demand trends in Europe and China that are offsetting U.S. market weakness.

Analysis

Mizuho Securities has revised its outlook on Tesla, lowering the price target to $375 from $390 and trimming revenue and delivery estimates for 2025 through 2027. This adjustment is predicated on persistent global sales headwinds and a decelerating growth outlook for battery electric vehicles (BEVs) in the U.S. The firm's 2025 revenue forecast of $91 billion now sits below its previous $91.7 billion estimate and notably trails the Street consensus of $95.9 billion, signaling a more cautious near-term view than the broader market. Despite these headwinds, Mizuho maintained its Outperform rating, citing Tesla's enduring leadership in the U.S. EV market and the potential of long-term catalysts, such as the robotaxi rollout. The revised price target is based on a multiple of 11.2x forecasted 2026 sales, a premium to Tesla's five-year average. This valuation is set against a backdrop of diverging regional trends: while the U.S. faces risks from the impending phaseout of IRA incentives, Mizuho has increased its 2025 global BEV production growth forecast from 6% to 15%, driven by robust demand in Europe, where registrations rose 25% year-to-date, and continued strength in China.

Key Decisions for Investors

• Investors should monitor Tesla's upcoming delivery reports with a focus on U.S. performance, as the lowered forecasts and the end of IRA incentives in Q3 present significant near-term risks to revenue.
• For long-term investors, the maintained 'Outperform' rating suggests that the current headwinds could present a tactical entry point, assuming confidence in future catalysts like robotaxis to justify the stock's premium valuation multiple.
• It is crucial to assess Tesla's performance on a global scale, as the current analysis indicates that strong growth in Europe and China may partially offset the identified softness and legislative risks within the U.S. market.