Tesla’s stock is facing a tough Thursday after reporting fourth-quarter earnings that fell short of expectations. Unclear volume guidance for 2024 is also contributing to the challenges. Following the fourth-quarter report, Wall Street analysts have expressed disappointment, with some reducing their price targets for Tesla’s stock. The company reported earnings per share of 71 cents, below the 73 cents anticipated by Wall Street.
Additionally, Tesla management’s indication of subdued automotive sales growth in 2024, without specific figures, has raised concerns. In 2023, vehicle sales grew by nearly 40%, reaching 1.8 million units, with expectations of 2.1-2.2 million units for 2024, marking a growth rate of about 20%, significantly lower than the previous year. Analyst Dan Ives from Wedbush commented on the situation, expressing surprise at the lack of a strategic and financial overview during the earnings call.
This has led to a negative impact on Tesla’s stock, which dropped by almost 8% in premarket trading. Despite this, Ives maintains a Buy rating for Tesla shares but has revised the price target to $315 from $350 per share. RBC analyst Tom Narayan also rates shares as Buy but adjusted the target price to $297 from $300 per share. He expressed concerns about the vague guidance and its potential impact on car gross margin expectations. Wells Fargo analyst Colin Langan highlighted the impact of recent price cuts on Tesla’s margins for 2024 and adjusted the target price to $200 per share from $223, while maintaining a Hold rating for the shares.
After the conference call, there have been at least seven price target cuts by Wall Street analysts. Despite the trend, Bernstein analyst Toni Sacconaghi, who rates shares as Sell, did not revise the price target and remains cautious about the company’s performance in 2024 and beyond. The average analyst target price for Tesla stock has decreased to about $226, reflecting a decline from the pre-call level. This has contributed to a 16% year-to-date decrease in Tesla’s stock, attributed to additional price cuts and weakening EV demand.
