Tesla’s Earnings Call Fallout: Analyzing the Stock Drop and Analyst Reactions

  • ๐Ÿ“‰ Tesla’s stock (TSLA) dropped over 9% after the Q4 and FY 2023 earnings call.
  • ๐Ÿ“Š Analysts express dissatisfaction due to Tesla’s vague guidance for 2024 and focus on the next-gen platform, leading to concerns about lower volume growth.
  • ๐Ÿ“ˆ Despite a record 2023 with 40% YoY vehicle sales growth to over 1.8 million units, Tesla indicates substantially lower volume growth for 2024.
  • ๐Ÿ—ฃ Wedbush analyst Dan Ives criticizes the earnings call as a “train wreck” and adjusts Tesla’s price target from $350 to $315 per share, though Wedbush remains bullish.
  • ๐Ÿ’ผ RBC analyst Tom Narayan maintains a “Buy” rating but lowers the price target from $300 to $297 per share, citing vague guidance and the next-gen platform’s distant impact.
  • ๐Ÿง  Morgan Stanley’s Adam Jonas notes Tesla’s conservative comments and lack of guidance during the call but maintains an “Overweight” rating with a $345 price target.
  • ๐Ÿค” Canaccord lowers its price target for Tesla from $267 to $234 per share but remains optimistic, urging investors to be patient and highlighting long-term growth prospects.
  • ๐Ÿš— Gene Munster of Deepwater Asset Management sees a positive note in Tesla’s auto gross margins, ending four consecutive quarters of decline, and remains a long-time Tesla bull.

Investors in Tesla (TSLA) found themselves on a rollercoaster ride as the company’s stock plummeted over 9% in the wake of its Q4 and FY 2023 earnings call. In this blog post, we’ll delve into the key factors behind this market reaction and explore how analysts are interpreting Tesla’s future prospects.

Understanding the Stock Plunge

The sharp decline in Tesla’s stock is a direct consequence of the market’s response to the company’s financial performance and guidance shared during the earnings call. Let’s break down the crucial elements contributing to this significant dip:

  1. Vague Guidance for 2024
    • Analysts have expressed dissatisfaction with Tesla’s ambiguous guidance for 2024. The company’s focus on the next-generation platform has raised concerns about lower volume growth in the coming year.
  2. Record 2023 vs. Substantial Drop in Growth Outlook
    • Despite Tesla achieving a remarkable 40% year-over-year growth in vehicle sales, the company surprised the market by signaling substantially lower volume growth for 2024. Wall Street expectations of 2.1 to 2.2 million vehicle sales were not met with a more optimistic outlook from Tesla.

Analyst Reactions: Mixed Sentiments

Analysts, known for their varied perspectives, have weighed in on Tesla’s situation with diverse opinions. Let’s explore how some of the key analysts have reacted:

1. Wedbush Analyst Dan Ives

  • Describing the earnings call as a “train wreck,” Ives adjusted Tesla’s price target from $350 to $315 per share. Despite the critique, Wedbush remains bullish on the company, acknowledging the long-term potential.

2. RBC Analyst Tom Narayan

  • Maintaining a “Buy” rating, Narayan lowered the price target from $300 to $297 per share. The decision was influenced by Tesla’s vague guidance and the perceived delayed impact of the next-generation vehicle platform.

3. Morgan Stanleyโ€™s Adam Jonas

  • Despite Tesla’s conservative comments and minimal guidance during the call, Morgan Stanley opted to maintain an “Overweight” rating with a $345 price target. Jonas highlighted the absence of groundbreaking announcements but remained optimistic about Tesla’s future.

4. Canaccord’s Perspective

  • Canaccord lowered its price target for Tesla from $267 to $234 per share. However, the firm encouraged investors to be patient, emphasizing optimism about Tesla’s long-term prospects, especially with upcoming developments like the next-generation vehicle and Full Self-Driving (FSD) upgrades.

5. Gene Munster’s Positive Note

  • Noting the end of four consecutive quarters of declining margins, longtime Tesla bull Gene Munster sees a positive turn in auto gross margins. This marks a deviation from the expected trend and adds a positive perspective to the overall analysis.

Looking Ahead: Navigating Uncertainty

As Tesla navigates a challenging period in the stock market, investors and enthusiasts alike are left contemplating the company’s trajectory. The key question remains: How will Tesla address the concerns raised during the earnings call, and what strategies will it employ to regain market confidence?

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