TSLA -19 to 188, facing a lot of headwinds, especially strong competition in China from BYD and sagging demand growth in the US and Europe. It's a great company, but the valuation may still be too rich at roughly 50x analyst 2024 EPS estimates.
Analyst commentary from fly -
Tesla downgraded to Neutral from Outperform at KGI Securities
KGI Securities downgraded Tesla to Neutral from Outperform with a price target of $213, down from $309. The company's Q4 earnings slightly missed estimates with gross margin down quarter-over-quarter, the analyst tells investors in a research note. The firm says the shares "lack near term catalysts" but that it sees "bargain hunting opportunities" in the next three quarters. KGI believes Tesla's research and development investments and ramp up of next-generation vehicles could weigh on its gross margin recovery before the second half of 2025.
Tesla price target lowered to $270 from $310 at Mizuho
Mizuho lowered the firm's price target on Tesla to $270 from $310 and keeps a Buy rating on the shares following last night's results. While Tesla did not guide 2024 volumes, it noted vehicle volume growth for the year may be notably lower than 2023, the analyst tells investors in a research note. The firm continues to see Tesla as a global leader in electric vehicles but says 2024 could be a more challenging year with subsidy cuts and a stretched consumer.
2024 will be challenging year for Tesla, 2025 likely not better, says Bernstein
Bernstein analyst Toni Sacconaghi notes Tesla slightly missed consensus revenues, operating margins and EPS, but free cash flow was well above expectations. More sobering was Tesla's outlook. Tesla stated that unit growth would be "notably below" this year's rate, Bernstein points out, adding that it also did not provide guidance on auto gross margins, other than it was approaching the "limits" of cost reductions on existing vehicles, and that cost improvement in 2024 would be lower than 2023. The firm continues to believe that Tesla will need to lower price and experience lower margins to drive incremental volume above last year's 1.8M level. While 2024 will be a challenging year, it is becoming "increasingly apparent that 2025 will likely not be better," with continued pressure on growth and margins, Bernstein adds. The firm has an Underperform rating on the shares with a price target of $150.
Tesla price target lowered to $200 from $223 at Wells Fargo
Wells Fargo lowered the firm's price target on Tesla to $200 from $223 and keeps an Equal Weight rating on the shares following quarterly results. The firm notes Tesla is trading down post market after cautious 2024 commentary. The company sees slowing delivery growth and a more limited ability to cut COGS. With recent pricing cut, margins likely fall in 2024, Wells adds.
Tesla seeing 'weak' growth until next-gen car comes in FY25, says Roth MKM
Roth MKM keeps a Neutral rating and $85 price target on Tesla after its "weak" Q4 results and the sixth sequential quarter of adjusted auto gross margin declines. Tesla management is now leaning on a next-gen vehicle to re-initiate growth in FY25 where the new modular manufacturing approach broadly elevates platform execution risk, and the firm sees multiple compression amid headwinds from sales mix and price cuts that likely stay negative, the analyst tells investors in a research note. Roth MKM maintains its view that Tesla shares are "egregiously overvalued".
Tesla price target lowered to $315 from $350 at Wedbush
Wedbush lowered the firm's price target on Tesla to $315 from $350 and keeps an Outperform rating on the shares following quarterly results. The firm says it was "dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand... instead we got a high-level Tesla long term view with another train wreck conference call." Nonetheless, Wedbush says the long term story is intact for Tesla and that it truly believes EV adoption to a much broader mass market is around the corner with AI/FSD the future. However, the near-term "Category 4 hurricane" around price cuts and lack of granularity, guidance, and communication from Musk and Tesla is "a bitter pill to swallow for the bulls."
