Tesla Cuts Prices on 2 Models. Analyst Raises Target for the Stock.

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Tesla
,
the electric-vehicle company run by billionaire Elon Musk, is cutting prices again.

The company lowered prices for its Model S and Model X vehicles on Sunday, potentially giving a boost to sales in the final month of the first quarter.

The Model S and X are Tesla’s higher-priced, lower-volume vehicles. Tesla delivered 66,705 Model S and X vehicles in 2022, accounting for about 5% of total vehicle deliveries.

The cut isn’t having a big impact on the stock.

Tesla

(ticker: TSLA) shares are flat in premarket trading Monday. So are futures on the

S&P 500
and

Dow Jones Industrial Average.

Based on postings on Tesla’s website, the price for a Model S was dropped $5,000, bringing the basic version to $89,990. The cost of the Model X SUV was dropped by $10,000, bringing the tag for the basic version to $99,990.

Cutting price has been a theme for the auto maker in 2023. Tesla cut prices in the U.S. on Jan. 12, knocking down the price for a Model Y by up to $13,000. That cut was partly designed to get more Tesla model trims under thresholds required to qualify for the new purchase tax credits passed as part of the Inflation Reduction Act.

About a week before that cut, Tesla cut prices for its vehicles in China. The Chinese price cut sent Tesla stock to its 52-week low of just under $102 a share. Investors and analysts were worried about demand and growth. Since then, however, both groups appear to have decided that the cuts are a smart strategic move amid a weakening economy, rising interest rates and more EV competition.

Since the early January low, Tesla stock is up about 94%. Coming into Monday trading, shares are up more than 60% so far this year.

Along with the Model S and X price cuts, investors have a couple of other things to digest early Monday.

Jefferies analyst Philippe Houchois raised his Tesla price target to $230 a share from $180. He kept his Buy rating on the stock.

His increase follows the company’s March 1 analyst and investor day. Shares dropped almost 6% following the event. People were hoping that a new, lower-priced EV would be unveiled or announced. While it was talked about several times, details about timing or design were thin.

Houchois isn’t worried about that, pointing out in his report that no formal announcement doesn’t mean a new Tesla model is delayed.

Along with a vehicle price cut and a Wall Street price increase, Tesla recalled 3,470 vehicles to fix a loose seat frame bolt. It’s a small recall and one for a hardware issue. Most Tesla recalls are fixed with over-the-air software updates.

Write to Brian Swint at brian.swint@barrons.com