Tesla stock woes are ‘overblown’ considering long-term catalysts: analyst

Tesla stock (NASDAQ: TSLA) has been under tremendous pressure as a result of CEO Elon Musk’s involvement in the United States Government and other factors, like tariffs and lower-than-expected delivery figures.

However, one analyst says that the concerns regarding Tesla’s short-term performance are “overblown”, considering all the things the company has in the works for the future.

Mickey Legg, an analyst for Benchmark, wrote in a note on Wednesday that much of the negative narrative that has hovered over Tesla shares for the past few months is exaggerated. Instead of looking at the near-term pullback on shares that has seen a 32 percent drop in share price since the beginning of the year, Legg is encouraging investors to look at the catalysts that lie ahead.

Legg wrote in the note to investors (via MarketWatch):

“We believe the recent stock pullback and sales declines, while significant, are overblown considering the near-term issues impacting the company and the scope of opportunities around the corner. After appreciating over 90% to a high of $488 after the Presidential election, the stock has pulled back to sub-$300 levels.”

The stock has felt immense pressure in the early portion of 2025, especially as some investors are questioning Musk’s focus on Tesla, with some arguing that his CEO role has seemingly taken a backseat to his responsibilities with the Department of Government Efficiency (DOGE).

Additionally, his capacity in the government has drawn some unwarranted criticism from some, resulting in vandalism and violence from his opposition.

However, Musk’s role with DOGE will eventually come to a close, and Legg is looking forward to that, as well as other catalysts that Tesla has announced in the past. For example, the company said it plans to launch affordable models in the first half of this year:

“Our focus is on the release of a new TSLA model in 2Q25, which in our view could turn around the recent decline in vehicle sales. Furthermore, we’re cautiously optimistic about the rollout of Tesla operated robotaxis as a paid service in Austin, TX scheduled for June. While the scope of the initial rollout is expected to be limited, we are focused on the rate of expansion of the operation both in Austin and to other cities.”

Legg finished by stating that he is under the impression that a reduced capacity in DOGE by Musk would be massive for the stock:

“Recent headlines suggest Musk could be reducing his role with the White House, and we can see political backlash diminishing as the year progresses. In our view there is significant potential for a stock rebound, and we believe the breadth of near-term opportunities outweigh headwinds.”

Tesla shares are up over 20 percent as of 3:22 p.m. on the East Coast.

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