Tesla’s recent stock pullback and sales declines, while significant, are overblown, according to Benchmark analyst Mickey Legg. Tesla jumped 4% in morning trading.

Tesla Inc. has had a tough few months, with Chief Executive Elon Musk at the center of a political maelstrom and the EV giant facing declining sales and intensifying competition, particularly in China, its second-largest market.

The fallout may be exaggerated, according to one Wall Street analyst.

"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," Benchmark analyst Mickey Legg wrote in a note released Wednesday. "After appreciating over 90% to a high of $488 after the Presidential election, the stock has pulled back to sub-$300 levels."

Tesla $(TSLA)$ shares have fallen 45.1% in 2025 amid the ongoing backlash against Musk over his key role in the Trump administration's controversial Department of Government Efficiency. Musk's leadership position in the so-called DOGE has seen the company's stock become a proxy for America's political polarization and sparked protests and counterprotests at Tesla sites.

Set against this backdrop. Tesla's first-quarter delivery numbers last week were worse than expected, and dropped to their lowest number since 2022's second quarter.

However, Benchmark has added Tesla to its Best Ideas list, albeit with a lowered price target of $350, down from $475. Specifically, Benchmark is eyeing Tesla's next big release.

"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," wrote Legg. "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."

Longer term, Benchmark believes that the Optimus robotics opportunity could be a "game changer" for Tesla, allowing the company to evolve from a vehicle manufacturer into a broad automation provider. Last month, Musk said that the company is planning to build 5,000 Optimus robots this year.

Legg added that Tesla is the least impacted by the recently imposed auto tariffs among the major automakers, citing the company's production of all its North American vehicles in California and Texas. Benchmark has a buy rating for Tesla.

Of 57 analysts surveyed by FactSet, 29 have an overweight or buy rating, 15 have a hold rating, and 13 have an underweight or sell rating for Tesla.

However, factors adversely affecting Tesla in the first quarter of 2025 include increasing global competition, an aging vehicle lineup, the anticipation of new products, regulatory uncertainty, tariffs and political blowback, according to Benchmark.

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

Benchmark is not alone in cutting its Tesla price target. Earlier this week, Wedbush analyst and longstanding Tesla bull Dan Ives cut his price target for the company's stock by 43% to $315.

In a note, Ives described the combination of the "Musk-created brand crisis" and Trump tariffs as a "perfect storm" for Tesla.

Tesla's stock ended Tuesday's session down 4.9% at $221.86. The stock is down seven of the last 10 sessions.