Tesla bulls expect Q1 to be the first official disappointment of a difficult 2024 with the global EV giant heading toward a likely delivery miss. In addition, full-year earnings predictions have dropped 94 cents since the end of 2023. TSLA shares edged lower Thursday.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, cut his TSLA price target to 300, from 315, on Wednesday while calling the quarter a "nightmare" for Tesla. The analyst said he remains bullish on Tesla over the long term, despite "near-term dark storm demand clouds forming."
Ives wrote Wednesday that when Tesla reports global deliveries next week, it won't be a "moment of celebration for the bulls and instead be a rip the Band-Aid quarter for Tesla investors."
The analyst added that Tesla dealt with issues surrounding its Model 3 Highland upgrade in the U.S. along with slowing sales in Europe. However, Ives noted the "biggest and most concerning issue for Tesla" is China as "rising EV competition and a lingering price war has made this key market very challenging for Tesla the last year and especially this quarter."
"We believe the Tesla narrative is as negative we have seen in the last few years with Musk/Tesla getting attacked by the bears from all directions. But unlike other times, now it's warranted as growth has been sluggish and margins showing compression with China a nightmare," Ives wrote Wednesday.
"For Musk this is a fork in the road time to get Tesla through this turbulent period, otherwise darker days could be ahead," the analyst said.
Tesla Handed Slew Of Target Price Cuts
Meanwhile, Morgan Stanley's Adam Jonas, another Tesla bull, cut his Q1 delivery estimate to 425,000, down from 469,000, on Wednesday. Jonas also lowered his full-year deliveries forecast to 1.95 million units.
In early March, Jonas issued an investor note in which he cut his Tesla 2024 earnings projections by 25%, saying that the EV giant could "potentially" lose money this year. Jonas slashed his Tesla price target to 320, down from 345, and whittled down his Tesla 2024 EPS projections to $1.51. His previous view was $2.04 per share.
Jonas currently projects auto gross profit margins, excluding regulatory credits, sinking to 12.9% as the analyst foresees continued demand issues for EVs.
Citi analyst Itay Michaeli on Wednesday lowered the firm's price target on Tesla to 196, down from 224, and maintained a neutral rating on the shares. The analyst also cut his first quarter delivery estimate to 429,900 from 473,300. Michaeli wrote that Tesla's Q1 "looks tough on aggressive consensus estimates." He added that Wall Street estimates look too high for 2024 and 2025.
Meanwhile, on Tuesday Bernstein analyst Toni Sacconaghi, who tends to be more bearish on Tesla, lowered his price target to 120 from 150. That represents a 33% downside to TSLA shares compared to current levels.
Sacconaghi kept an underperform rating on Tesla stock. The Bernstein analyst noted that Tesla has experienced "soft" demand in China and Europe in Q1 along with "constrained" U.S. Model 3 production. Sacconaghi also trimmed his first quarter deliveries forecast to 426,000 units, down from 490,000. The analyst also projects 2025 EPS of $2.22.
However, Canaccord Genuity analyst George Gianarikas on Tuesday sounded a more optimistic tone as he reiterated a Tesla stock price target of 234 and a buy rating.
"We view much of the negativity currently surrounding Tesla as extreme," Gianarikas wrote. The analyst added that earnings revisions have been "nasty for some time." However, he also adjusted Q1 delivery estimates to 420,000, down from 441,000.
Full-Year EPS Predictions, Q1 Deliveries Come Down
The recent Tesla stock price revisions come as analyst consensus now has 2024 Tesla earnings firmly below 2023's level. That signals another year of earnings declines for this growth stock. Wall Street currently expects Tesla earnings per share of just $2.88 in 2024, according to FactSet. That would be an 8% decline vs. last year's $3.12.
Wall Street's 2024 EPS consensus estimates for Tesla have now come down nearly 25% since the end of 2023. Some analysts believe earnings could drop even further, potentially around 2021 EPS of $2.26.
With just days left in the first quarter, Wall Street consensus also currently expects Q1 deliveries of 457,000 units, according to FactSet. This number started the week at 471,000 and could come down more before Tesla announces global deliveries.
Predictions appear to be more around Tesla's 422,875 number from Q1 2023. The global EV giant hit a record 484,507 deliveries in Q4 2023. The previous quarterly delivery record was in Q2 with 466,140.
Tesla is expected to report Q1 2024 deliveries early next week.
Tesla Stock Has Plunged In 2024, But At Least It's Cheaper, Right? Nope
Tesla Stock Performance
TSLA shares fell 2.2% to 175.79 during market action Thursday. On Wednesday, Tesla stock advanced 1.2% to 179.83. Tesla rose this week as it started rolling out its latest Full Self-Driving (FSD) update to Tesla customers. TSLA shares, which backed off intraday highs Tuesday, are trading modestly below the 50-day moving average.
Emails from Chief Executive Elon Musk leaked on social media platforms showing he is making it mandatory in North America to install and activate the latest version of FSD on vehicles and take customers on a "short test ride before handing over the car."
Tesla also announced Monday it is offering a one-month free trial of FSD in the U.S. for new purchases or existing EVs that are FSD capable.
Last week, Tesla stock gained 4.4%, booking its first weekly advance in three weeks. Two weeks ago, Tesla stock dropped 6.7% to 163.57, hitting new 2024 lows and levels not seen since May 2023. TSLA is down around 13% in March and the biggest loser on the S&P 500 index so far in 2024.
The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 34 Composite Rating out of a best-possible 99. Tesla stock also has an 11 Relative Strength Rating and a 68 EPS Rating.
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