Citi has lowered its price target for Tesla $TSLA from $224 to $196 and maintains a Neutral rating on the stock.
The analyst notes that while buy-side estimates for Tesla’s first quarter deliveries are in the low 400,000s, they are significantly lower than the sell-side consensus, which ranges from 460,000 to 470,000 but is decreasing.
The analyst believes that the current situation presents challenges, as street estimates for Tesla’s performance in 2024 and 2025 are still too optimistic.
With recent data points and a heavy reliance on March, the analyst sees more downside potential than upside potential to their estimates.
Canaccord Genuity has reiterated its ‘BUY’ rating for Tesla $TSLA stock and maintains a price target of $234.
The analyst believes that much of the negativity surrounding Tesla is extreme, indicating an overly pessimistic sentiment among investors.
While acknowledging that Tesla is currently between two major growth waves and has faced negative earnings revisions, the analyst argues that the current sentiment does not accurately reflect the company’s fundamentals.
The issues in the first quarter of 2024 are seen as primarily demand-related but also influenced by supply constraints, which may have cost Tesla approximately 95,000 units in deliveries.
Despite these challenges, the analyst sees potential for positive earnings revisions in 2024, especially as the Cybertruck ramps up production and margins improve.
Canaccord Genuity is adjusting its delivery estimates for the first quarter of 2024 from 441,000 to 420,000 units, citing murmurings of expectations in the low 400,000 range.
The firm is also reducing its volume estimates for 2024 from around 2.08 million to approximately 2.04 million units.
The 2024 non-GAAP EPS estimate is being lowered from $4.02 to $3.60 due to adjustments in the tax rate and operating expenses.
Despite these adjustments, the price target of $234 remains unchanged, based on a multiple of 26x the firm’s 2026 estimated non-GAAP EPS.
Canaccord Genuity emphasizes that while short-term challenges exist, it is not adjusting its long-term estimates for Tesla‘s performance.
