Major analysts are cautious on Tesla following the company’s quarterly results, believing that the price cuts by the electric vehicle maker may be sacrificing too much in terms of profitability. Tesla shares slid more than 6% in early trading after the company reported a drop in GAAP earnings from a year earlier . Chief executive Elon Musk pointed to economic “uncertainty” and “stormy weather” ahead that could dent car demand on the earnings conference call. The company also said underutilizing new production plants along with higher costs added stress to margins. But the focus of analysts were the price cuts and how far the company will go to juice demand. So far this year, the company has slashed prices on both the Model 3 and Model Y in the U.S. six times . Analysts fear this will hit margins even further. Here’s what the major analysts were saying: JPMorgan, Underweight rating, $115 price target (Down from $120): “In what may be yet another indication that demand is not as robust as management expected, inventory has been building (to enough to satisfy 15 days of sales at the end of 1Q23, up from just 3 days supply a year ago). This inventory build cost the company $1.5 bn of cash in 1Q, resulting in free cash flow of just +$441 mn (which would have been negative if not for the $521 mn from the sale of regulatory credits), or far short of JPM +$1,872 mn.” Wells Fargo, Equal Weight rating, $170 price target (Down from $190): “Trading margin for market share…TSLA is trading down post market following a Q1 auto margin miss. The company walked back from its > 20% auto GM target. TSLA continued with price cuts, highlighting their cost edge vs. peers. We are cautious of the discounting given LT brand risk.” Oppenheimer, Perform rating, NA price target: “While we believe TSLA will benefit over time from market share gains and margin capture, we expect near-term margin pressure to be a concern for investors.” Deutsche Bank, Buy rating, $200 price target: “Margin risk remains an overhang; price strategy even worse for other OEMs…Tesla Q1 results showcased considerable deterioration in automotive gross margins on the back of large price cuts, in-line with our street-low estimates, but well below consensus expectations as well as management’s guidance.” Bank of America, Neutral rating, $225 price target (up from $220): “Tesla commentary suggested that growing volume was a priority over pricing and near-term profits, and the intention is to realize greater profit from post sale products such as Full Self Driving (FSD)…The company’s 1Q:23 performance was better than feared, EV demand continues to grow, and TSLA has ongoing access to relatively low-cost capital (internally & externally) to support future growth. That said, this is balanced by concerns of increased EV competition, further price cuts, and macro challenges. Therefore, on balance we reiterate our Neutral rating.” Evercore ISI, In Line rating, $165 price target: “Gross margin red line of “20%” breached (Q2 will be lower).” Jefferies, Buy rating, $230 price target: “Still looking for a margin floor…Bigger miss on cash flow at ~$440m (cons $2.2bn) with expected inventory jump not offset by higher payables. Guidance of 1.8m units maintained but Q1 did not give great confidence on price elasticity or a gross margin floor given priority on volume over near term profitability.” Goldman Sachs, Buy rating, $185 price target: “Tesla reported a non-GAAP automotive gross margin (including SBC and excluding the revenue from regulatory credits) of 19%, below GS at 21%, and lower than the 20% level the company has spoken about on its 4Q22 earnings call…We believe the report was an incremental negative, with the company’s pricing actions pressuring the automotive gross margin excluding credits by more than we had expected.” Bernstein, Underperform rating, $150 price target: “Importantly, despite significant price cuts, demand still appears challenged for Tesla and price elasticity appears to be more muted than Tesla believed. We estimate that Tesla’s annualized order run-rate exiting Q1 may have been 1.2M units per year, well below Tesla’s goal.” Piper Sandler, Overweight, $300 price target: “While skeptics may focus on < 20% automotive gross margin, we think an obsession with this metric is unwarranted. True, the CFO hinted that 20%+ should be doable, but we had actually modeled sub-20% all along, and overall company-wide performance compared favorably vs. our forecast.” RBC Capital Markets, Outperform, $212 price target (down from $217): “Near-term Tesla is willing to trade gross margin for higher volume. Long-term we believe this is the right strategy and leverages their cost leadership position and preserves the potential lifetime value of new customers. However, this does not come without pain as we now believe margins will get worse before they get better.” Citigroup, Neutral rating, $175 price target (Down from $192): “The Q1 margin miss confirms that price cuts weren’t offset to the extent previously expected. This, along with recent Q2 price cuts, could dampen NT sentiment since margins will likely come to be viewed as more vulnerable with Tesla fully committed to 2023 volume targets amid a softer macro backdrop. We expect the stock to pull back.” Morgan Stanley, In-Line rating, $200 price target (Down from $220): “The company is in the early innings of ‘investing’ its cost leadership (down) into price (down). As Tesla’s margins fall, competitors may need to re-assess their EV strategies.” — CNBC’s Michael Bloom contributed to this report.