LB Select
2023.09.28 05:31
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Be cautious starting from the third quarter! Why is Tesla in danger next year?

Tesla's target price has been lowered by Deutsche Bank! The reason is that deliveries and production in the third quarter may be lower than Wall Street's expectations. But more importantly, the biggest concern lies in the demand for 2024, beyond the weak quarterly performance!

September has seen a 7% decline, and Tesla, which experienced a maximum drawdown of nearly 16% this month, is causing increasing unease on Wall Street!

In the latest research report, Deutsche Bank analyst Emmanuel Rosner lowered Tesla's target price by 5% to $285, while maintaining a "buy" rating. Based on the latest closing price, this price still implies an upside potential of 18.5%!

According to Deutsche Bank, one of the reasons for the target price downgrade is that Tesla's deliveries and production in the third quarter may be lower than Wall Street's expectations. However, more importantly, "due to limited sales growth next year, there is a significant downside risk to Wall Street's consensus expectations for Tesla in 2024."

Currently, Deutsche Bank's expectation for Tesla's third-quarter deliveries has been lowered from 455,000 vehicles to 440,000 vehicles, which is lower than the general expectation of 462,000 vehicles on Wall Street.

Weak quarterly performance is one aspect, but the demand for 2024 is the biggest concern.

Deutsche Bank stated that Tesla recently indicated at an investor conference that it no longer plans to expand the capacity of the Austin and Berlin factories to 10,000 vehicles per week. Therefore, the bank expects Tesla's deliveries next year to be only 2.1 million vehicles, which is also lower than the Wall Street consensus of 2.3 million vehicles.

For investors, the downward revision of delivery expectations, weak production growth, and the possibility of poor delivery of the highly anticipated Cybertruck next year are not good news.

However, Deutsche Bank also stated that although Tesla's stock may face risks in 2024, there are still some positive aspects:

  1. When Tesla is no longer focused on chasing sales volume, the pricing pressure on cars next year may ease.

  2. In the long run, the next generation of low-cost vehicles will change the rules of the entire industry, and whether Tesla can succeed in 2025 is crucial.