Following Tesla's (NASDAQ:TSLA) Q4 and FY 2023 earnings call, the stock experienced a significant downturn, plummeting over 9% at the time of writing. Analysts, including some who were previously optimistic about TSLA, expressed dissatisfaction with the company's guidance for the upcoming year, citing concerns about vague executive statements and a tempered focus on volume growth due to the next-generation platform.
Despite Tesla achieving a record-breaking 2023 with a nearly 40% YoY increase in vehicle sales to over 1.8 million units globally, Wall Street's expectations for 2024 sales are estimated at 2.1 to 2.2 million vehicles, reflecting a more conservative growth projection of about 20%. Tesla, however, hinted that its volume growth in 2024 would be significantly lower than the impressive ~40% seen in 2023.
In response to the earnings call, Wedbush analyst Dan Ives criticized it as another "train wreck" conference call, expressing disappointment in the lack of strategic and financial insights regarding ongoing price cuts, margin structure, and fluctuating demand. Despite adjusting the price target from $350 to $315 per share, Ives emphasized that Wedbush maintains a bullish stance on the company.
RBC analyst Tom Narayan, while maintaining a "Buy" rating on Tesla, lowered the price target from $300 to $297 per share. Narayan acknowledged the vagueness in guidance but left delivery estimates unchanged, citing concerns about a less robust cost reduction opportunity and highlighting that Tesla's next-generation vehicle platform is still "many quarters away" from impacting the company's financial performance.
Adam Jonas from Morgan Stanley highlighted during the earnings call that Tesla provided minimal guidance and did not unveil any notable "AI rabbits," especially emphasizing Elon Musk's cautious comments about Dojo. Despite this, Morgan Stanley chose to maintain its "Overweight" rating on Tesla, along with a $345 price target. The firm outlined a bear case with a $100 price target and a bull case with a $500 per share target.
Although the overall sentiment around Tesla's Q4 and FY 2023 earnings call appears negative, some analysts expressed a more optimistic perspective. Canaccord reduced its price target for Tesla from $267 to $234 per share but urged investors to exercise patience. The firm remains optimistic about Tesla's long-term prospects, anticipating an acceleration in revenue growth driven by next-generation vehicles, Full Self-Driving (FSD) upgrades, margin improvements, and the Optimus initiative. Canaccord projected a subdued 2024, describing it as a potential trough year with relatively slow year-over-year revenue growth around 18%.
Canaccord stated, "We are still quite bullish on Tesla’s long-term growth prospects. We think EVs will replace ICE vehicles despite recent countervailing narratives. We see vehicle autonomy as one of the highest value-creating technologies to be deployed. Ever. And Tesla, with its razor/razorblade approach, is a leader in this real-world AI. We think Tesla is Apple on steroids as it focuses on manufacturing and a higher level of vertical integration. Tesla is THE sustainability behemoth, in our opinion."
Gene Munster of Deepwater Asset Management, a longtime Tesla supporter, noted that the auto gross margins for the last quarter ended a streak of declining margins. Despite missing the Street's expectations with a 17% margin (versus the expected 17.3%), Munster viewed this positively, marking the end of four consecutive quarters of margin decline and an improvement from 16.3% in the previous quarter.
---------The article excerpted from TESLARATI.