LB Select
2024.04.03 11:18
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Tesla Q1 sales stalled? Analysts: a bit disappointed

HSBC: In addition to the slowdown in sales growth, the bank's main concerns are related to the uncertainty of timing and commercialization of various projects with Tesla, including Dojo (supercomputer), FSD (Full Self-Driving), Optimus (humanoid robot), etc

Since the first quarter, Wall Street investment banks have repeatedly lowered their expectations for Tesla's Q1 delivery volume, but the data released shows that analysts' expectations were still too optimistic.

On April 2nd, Tesla's first-quarter production and sales report showed that Tesla's delivery volume fell by 8.5% year-on-year to about 386,800 vehicles, a decrease of over 20% from the previous quarter, far below analysts' previous expectations of 449,000 vehicles, marking the largest deviation from expectations on record.

Colin Langan, an analyst at Wells Fargo, previously predicted that Tesla's core issue is that its once strong growth capability has waned, with multiple price cuts to stimulate demand yielding minimal results, and revenue and profit growth slowing significantly. Tesla's sales volume will be flat this year, and by 2025, the situation will worsen with sales volume declining. The target price for Tesla has been lowered from $200 to $120, implying a further decline of around 30%.

Tesla's stock plummeted nearly 7% intraday, ending down 4.9% at $166.63. Currently, Tesla's market value is less than $530 billion, less than a quarter of NVIDIA's market value, and far behind the five tech giants of the US stock market (Microsoft, Apple, Google, Amazon, and Meta).

After Q1 delivery, analysts generally lower target prices

HSBC

HSBC lowered Tesla's target price to $138. Tesla's first-quarter delivery volume was 13% lower than market expectations, dropping 20% quarterly. The target price was reduced from $143 to $138, maintaining a "reduce" rating.

HSBC research pointed out that Tesla's price cuts did not lead to sales growth. Tesla lowered the US listing prices of its models by nearly 20% last year and by nearly 9% so far this year. However, the price cuts did not seem to have the expected effect. For example, car rental and leasing companies like Sixt and Hertz have chosen to reduce their use of Tesla vehicles, partly due to uncertain used car prices. Due to Tesla's aggressive pricing policies and slowing delivery growth, the bank lowered its Tesla EBIT (earnings before interest and taxes) forecast by 18% for this year.

In addition to concerns about slowing sales growth, the bank's main concerns are related to the uncertainty of Tesla's various projects including Dojo (supercomputer), FSD (Full Self-Driving), Optimus (humanoid robot), and their timing and commercialization. The bank pointed out that Musk described Dojo as "long-term, high-risk, high-return, low probability of success" during the fourth-quarter conference call, further confirming the bank's view. Furthermore, Musk's compensation controversy adds uncertainty to the stock and raises governance issues, as well as concerns about potential dissatisfaction with the outcome.

Truist

Truist adjusted Tesla's target stock price from $227 to $176, maintaining a hold ratingIn addition, according to analysts' data from Capital IQ, Tesla's target stock price ranges from $85 to $320.

The highest target price of $320 was given by Morgan Stanley, who lowered it from $345 to $320 on March 6, 2024;

While the lowest target price of $85 was given by Roth MKM on October 19, 2023.

Since February this year, Tesla's ratings are as follows:

Baird

The long-standing bull Baird stated: Maintains Tesla's rating, but adjusts the target price from $300 to $280.

Deutsche Bank remains optimistic

Deutsche Bank remains optimistic, maintaining Tesla's target stock price at $200 per share and continues to rate it as a buy.

Tesla has fallen by about 33% since the beginning of 2024, and 44% from its peak in July last year, making it the worst-performing large-cap tech stock