Tesla bulls turn bearish as ‘Nightmare’ Q1 ends

Tesla (TeslaBulls expect Q1 to be the first official disappointment of a difficult first quarter of 2024, with the global EV giant likely to experience delivery missteps. Additionally, full-year profit estimates have fallen 94 cents since the end of 2023. Tesla shares edged lower on Thursday.


Wedbush Securities analyst Dan Ives is optimistic about Tesla in the long term. On Wednesday, he lowered his target price for Tesla from 315 to 3oo, and also called this quarter a “nightmare” for Tesla. The analyst said he remains bullish on Tesla in the long term, despite the “near-term dark storm demand cloud building.”

Ives wrote on Wednesday that when Tesla reports global deliveries next week, it won’t be “a moment of celebration for the bulls, but rather a Band-Aid quarterly tear for Tesla investors.”

The analyst added that Tesla is dealing with issues surrounding its Model 3 Highland upgrade in the United States and slowing sales in Europe. However, Ives noted that “Tesla’s biggest and most worrisome issue” is China because of “increased competition in electric vehicles and lingering price wars.” Last year, and especially this quarter, this key market was very challenging for Tesla. “

“We think the Tesla narrative is negative, and we’ve seen over the past few years that Musk/Tesla has been attacked by bears from all sides. But unlike other times, now it makes sense because Growth has been weak and margins are showing compression with China. Nightmare,” Ives wrote on Wednesday.

“For Musk, this is a fork in the road to get Tesla through this tumultuous period, otherwise the days could be much darker,” the analyst said.

Tesla cuts a range of price targets

Meanwhile, another Tesla bull at Morgan Stanley, Adam Jonas, on Wednesday lowered his first-quarter delivery forecast to 425,000 units from 469,000 units and lowered his full-year delivery forecast to 195,000 units. Thousands of vehicles.

In early March, Jonas released an investor report in which he cut Tesla’s 2024 profit forecast by 25%, saying that the electric vehicle giant “could” lose money this year. Jonas lowered his Tesla stock price target to 320 points from 345 points, and he lowered Tesla’s 2024 earnings per share forecast to $1.51 per share, compared with the previous expectation of $2.04 per share.

Jonas currently expects auto gross margin, excluding regulatory credits, to fall to 12.9% as analysts expect demand issues for electric vehicles to persist.

Citi analyst Itay Michaeli lowered the company’s price target on Tesla to 196 points from 224 points on Wednesday and maintained a neutral rating on the stock. The analyst also lowered his first-quarter delivery forecast to 429,000 units from 473,300 units. Michaeli wrote that Tesla’s first-quarter results “aggressive consensus forecasts look tough.” Wall Street forecasts for 2024 and 2025 look too high, he added.

Meanwhile, on Tuesday, Bernstein analyst Toni Sacconaghi, who is more pessimistic about Tesla, lowered his price target to 120 points from 150 points. This means Tesla shares are down 33% from current levels.

Sacconaghi maintains an underperform rating on Tesla stock. The Bernstein analyst noted that Tesla experienced “soft” demand in China and Europe and “constraints” on Model 3 production in the United States in the first quarter. Sacconaghi also lowered his first-quarter delivery forecast to 426,000 vehicles. Starting from 490,000. Analysts also expect 2025 earnings of $2.22 per share.

However, Canaccord Genuity analyst George Gianarikas struck a more optimistic tone on Tuesday, reiterating his Tesla stock price target of $234 and giving him a buy rating.

“We believe much of the negative sentiment surrounding Tesla currently is extreme,” Ginalikas wrote. The analyst added that earnings revisions “have been bad for some time.” However, he also lowered his first-quarter delivery forecast to 420,000 units from 441,000 units.

Full-year EPS forecast, first-quarter deliveries down

The recent correction in Tesla’s stock price comes as analysts generally believe Tesla’s profits in 2024 will be firmly below 2023 levels. That marks another year of earnings decline for the growth stock. Wall Street currently expects Tesla to earn just $2.88 per share in 2024, according to FactSet. That’s down 8% from last year’s $3.12.

Wall Street’s consensus estimate for Tesla’s 2024 earnings per share has now risen nearly 25% since the end of 2023. Some analysts believe profits could fall further, possibly to around $2.26 per share in 2021.

With just days left in the first quarter, Wall Street’s consensus forecast is for first-quarter deliveries of 457,000 vehicles, according to FactSet. That number stood at 471,000 vehicles at the start of the week and could fall further before Tesla announces global deliveries.

Forecasts appear to be centered more around Tesla’s first quarter 2023 number of 422,875 units. The global electric vehicle giant set a record delivery volume of 484,507 vehicles in the fourth quarter of 2023. The previous quarter’s delivery record was 466,140 units in the second quarter.

Tesla is expected to announce deliveries for the first quarter of 2024 early next week.

Tesla stock plummets in 2024, but at least it’s cheaper, right?No

Tesla stock performance

Tesla shares fell 2.2% to 175.79 market action Thursday. Tesla shares rose 1.2% to 179.83 on Wednesday. Tesla is rising this week as it begins rolling out its latest Full Self-Driving (FSD) update to Tesla customers. Tesla shares fell back from session highs on Tuesday and are now trading slightly below their 50-day moving average.

An email from CEO Elon Musk leaked on social media platforms showed that he is mandating that vehicles in North America install and activate the latest version of FSD and allow customers to conduct “brief test drives before delivery.”

Tesla also announced on Monday that it will offer a one-month free trial of FSD in the United States for new purchases or existing FSD-enabled electric vehicles.

Last week, Tesla shares rose 4.4%, their first weekly gain in three weeks. Two weeks ago, Tesla shares fell 6.7% to 163.57, hitting a new low in 2024 and a level not seen since May 2023.Tesla fell about 13% in March and S&P 500’s biggest decline 2024 to present.

The EV giant ranks eighth in the 35-member IBD Automobile manufacturers industry cluster.The stock has 34 Overall rating Best 99 points.Tesla stock also has 11 points relative strength rating and a 68 EPS Rating.

Follow Kit Norton on X (formerly Twitter), @kitnorton for more coverage.

You might also like:

Is Tesla stock a buy or a sell?

Comprehensive access to IBD stock lists and ratings

Learn how to pick great stocks?Read the Investor Corner

Is Rivian a buy after launching new product line?

Futures: Small-cap stocks higher as growth leaders retreat

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button