Tesla Q4 Production In-Line, What Does Wall Street Say After Its Delivery Data?
Tesla delivered more vehicles than expected in the fourth quarter, handed over 484,507 vehicles in the last three months, beating analysts’ average estimate for 483,173 deliveries. All told for 2023, Tesla said vehicle deliveries grew 38% year over year to 1.81 million while production grew 35% YoY to 1.85 million.
While Tesla exceeded its target to deliver 1.8 million vehicles for the year, the EV maker came up well short of an upside scenario Musk touted 12 months ago. After the chief executive officer told analysts the company had the potential to produce 2 million cars, a series of price cuts failed to stoke enough demand to support that much output.
In addition, Tesla is facing new headwinds at the start of 2024. According to U.S. Treasury, many electric vehicles lost eligibility for tax credits of up to $7,500 after new battery sourcing rules took effect on Monday, including the Tesla Cybertruck All-Wheel Drive, Model 3 Rear-Wheel Drive and Long Range vehicles.
Jairam Nathan, an analyst at Daiwa Capital Markets, trimmed his estimate for Tesla's deliveries next year to 2.04 million from 2.14 million and said he was modeling for a 4% decline in average revenue per car from 2023.
"Tesla candidly admitted the company is now in an intermediate low-growth period," Deutsche Bank analyst Emmanuel Rosner wrote in a note, citing a meeting with Investor Relations Chief Martin Viecha.
Tesla 2024 analyst predictions after its Q4 delivery data
• UBS keeps a Neutral rating and $250 price target on Tesla after its Q4 delivery data, which likely came in "modestly above expectations".Looking ahead to the company's earnings, investor focus now turns to margins, and while some pricing actions helped drive volume, which is a margin negative, this is likely offset by higher volume absorption and likely lower input costs, the analyst tells investors in a research note. UBS adds however that the main focus will likely be 2024 unit guidance, where the firm expects 2.06M units vs. "company-collected consensus of 2.17M units".
• Citi analyst Itay Michaeli keeps a Neutral rating and $255 price target on Tesla after its Q4 production data.The achievement of Tesla's 1.8M 2023 volume goal will likely be viewed favorably amid the generally negative sentiment around EV demand, though from here, the focus will shift to Q4 automotive margins to gauge the price vs. cost equation, the analyst tells investors in a research note.
• Goldman Sachs analyst Mark Delaney tells investors in a research note that Tesla's preliminary Q4 delivery report was "solid,"with deliveries reaching a record high, albeit only slightly above consensus, the analyst tells investors in a research note. The firm, which believes sales into China were particularly strong in Q4, made no change to its Neutral rating or $235 price target.
• However, according to Bernstein, 2024 'looks tough' for Tesla. Bernstein analyst Toni Sacconaghi says Tesla reported Q4 deliveries of 485,000, broadly in-line with the sell-side consensus of 480,500. The firm believes auto gross margins excluding credits "are a key question." It models 15.7% versus the consensus estimate of 17.8% but sees potential downside given the impact of price cuts in September and October as well as significant discounting of "inventory" models in the quarter. For fiscal 2024, Bernstein believes Tesla will likely see lower margins and disappoint on volumes. More investors will begin to increasingly question the company's growth narrative, particularly since Tesla will struggle to grow deliveries 20% in 2024, well below its target of 50%, the analyst tells investors in a research note. The firm keeps an Underperform rating on Tesla with a $150 price target.
• Moreover, Roth MKM analyst Craig Irwin, a long-time bear on Tesla, reiterated his $85 price target for the EV maker, that implies shares more than halving from their current levels.
When asked about the 2024 outlook for deliveries on the company’s last earnings call, Musk said: “At the risk of stating the obvious, it is not possible to have a compound growth rate of 50% forever, or you will exceed the mass of the known universe. But I think we will grow very rapidly, much faster than any other car company on Earth by far.”
Tesla CFO Vaibhav Taneja said then that Tesla was focused on “growing our volumes in a very cost-efficient manner,” and would provide 2024 guidance on the next earnings call. Tesla plans to discuss fourth-quarter results on Jan. 24, 2024, at 5:30 pm ET.
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102185397 : Tesla fell short of the 2 million mark it said it would achieve in the beginning but changed to 1.8 million halfway through so although deliveries met the mark this month and in total, it actually fell short by 200,000 in actual fact despite offering steep discount and of course affected its overall profit margin - still will drop further this year!!
IamMoooo : blah blah blah!!!!
Supermengg : Good
Silverbat : Was a big surprise to many analysts that deliveries meet 1.8M goal at price cuts. If GM exceeds Wall Street estimates, share price may rally to new highs.
Silverbat : If Model 2 at earlier production in 2024 Q3, the yearly deliveries might jump to 2.7 M!
bullrider_21 Silverbat: It was not a surprise. The Q4 deliveries met the low end of analyst expectations.
Silverbat bullrider_21: Was estimated under 1.6-1.7M because of doubts of price cuts impact!
bullrider_21 Silverbat: Instead of rallying to new high, Tesla crashed below Oct 2023 low.