Tesla Will Disappoint on All Fronts in Q4, Deutsche Bank Warns By Investing.com

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Deutsche Bank analysts cut the Tesla (NASDAQ:) stock price target to $270 from $355 previously due to lower fourth-quarter shipment estimates.

Analysts cut estimates to 420,000 electric vehicle (EV) units, implying growth of 36% year-on-year (YoY) and 22% quarter-on-quarter (QoQ), respectively. They previously expected the EV maker to ship around 440,000 units.

The new projections take into account “some macroeconomic weakness, particularly in China, as well as the 1st quarter 23 US shipments report from some consumers to benefit from IRA incentives,” wrote analysts in a note to the client.

As a result, they cut fourth-quarter revenue estimates to $20.8 billion to allow for reduced volumes, from $22.5 billion previously. As for earnings per share (EPS) discounters, analysts will now get EPS of $1.05 (from $1.18 previously).

The street consensus for Tesla’s fourth quarter numbers currently calls for EPS of $1.25 on revenue of $25.9 billion. Analysts also revised consumer gross margin lower from +100bps QoQ to -30bps QoQ.

“Beyond the quarter, we continue to expect challenging headlines around slowing demand and associated price reductions, but we believe the company remains best positioned to weather the current macro conditions, building on on pricing to support volume growth and on various cost levers in place to protect margins,” they added.

However, Deutsche Bank analysts remain bullish on Tesla stock over the long term, given its leading position in the electric vehicle market.

“We continue to view Tesla as a leader in the automotive industry thanks to its superior cost structure and agility amid challenging macro conditions. In the very near term, it is building more commendable capacity to support meaningful growth. In the medium term, the company is looking to launch its next-generation platform which is expected to support many more vehicles and segments, as well as robotaxis, and is aiming for a total cost of ownership of $20,000 per vehicle,” they concluded.

By Senad Karaahmetovic

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