On Thursday, Bernstein SocGen Group maintained its Underperform rating on Tesla (NASDAQ:TSLA) with a steady price target of $120.00. The analyst's statement highlighted Tesla's third-quarter delivery numbers, which were reported at approximately 463,000 vehicles, aligning with the sell-side consensus of 462,000 but falling slightly short of the third-party expectations of around 470,000. Production for the quarter was noted at 470,000 units, leading to a minor inventory build now standing at 3.7 weeks.
Tesla's energy storage shipments reached 6.9 gigawatt-hours, surging 73% year-over-year, though marking a 27% sequential decrease. Despite the growth in energy storage, the analyst expressed skepticism about Tesla's ability to increase unit growth this year, even with potential price reductions or advantageous financing options. This outlook contrasts with Tesla's previous goal of maintaining over 50% growth in units.
The report also reflected a significant shift in investor attention from delivery volumes to the potential of Tesla's robotaxi, as evidenced by a 56% rise in Tesla's stock following the announcement of its Robo-Taxi day. This increase comes after a 34% decline in the stock from January 1 to April 5. However, the analyst conveyed doubts about Tesla's capacity to outpace competitors in the autonomous driving market and "win" in the autonomy/robotaxi space.
Looking ahead to 2025, the analyst projected challenges, not foreseeing the introduction of a lower-cost Tesla Model 2 in significant volumes until at least 2026. Upcoming models expected to begin production in the first half of 2025 were described as modest revisions unlikely to substantially alter Tesla's demand dynamics. Forecasts for fiscal year 2025 include 1.97 million units and earnings per share of $2.62, a figure approximately 60% below the target if Tesla had sustained its 50% compound annual growth rate from 2021.
In other recent news, Tesla reported third-quarter vehicle deliveries of approximately 463,000, marking a 4% increase from the previous quarter and a 6% rise year-over-year. This figure closely aligns with the Visible Alpha Consensus forecast and Goldman Sachs' estimate. Tesla also reported strong production figures with around 470,000 vehicles produced, up 9% from the same period last year. Despite these numbers, Tesla's third-quarter delivery results fell short of some expectations, leading several analyst firms to revise their outlooks.
Truist Securities raised its price target for Tesla to $236, maintaining a Hold rating, while Bernstein SocGen Group kept its Underperform rating and a $120 price target. Additionally, TD Cowen held steady with a Hold rating and a $180 price target, and Stifel maintained its Buy rating with a $265 price target.
Tesla also recently discontinued its most affordable Model 3 variant in the U.S., now offering the Model 3 Long Range Rear-Wheel Drive as its entry-level electric vehicle at $42,490. This development follows increased tariffs on Chinese goods, affecting the previously offered model's lithium iron phosphate battery cells.
Furthermore, Evercore projects Tesla's earnings per share to range between 57 to 59 cents. Tesla also recently won a dismissal of a shareholder lawsuit over self-driving technology claims and saw an increase in its market share in Sweden to 8.5% in 2024.
InvestingPro Insights
As we delve deeper into Tesla's current financial landscape, InvestingPro data reveals some intriguing metrics that complement Bernstein SocGen Group's analysis. Tesla's market capitalization stands at an impressive $795.53 billion, reflecting its dominant position in the electric vehicle market. However, the company's P/E ratio of 63.97 suggests a high valuation relative to earnings, which aligns with the analyst's cautious stance.
InvestingPro Tips highlight that Tesla is "trading at a high earnings multiple" and has a "high P/E ratio relative to near-term earnings growth." These insights corroborate the analyst's skepticism about Tesla's growth prospects, particularly in light of the projected challenges for 2025 and beyond.
Despite these concerns, it's worth noting that Tesla "holds more cash than debt on its balance sheet," indicating financial stability. This could provide the company with flexibility as it navigates the competitive landscape of autonomous driving and potential future model launches.
For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips on Tesla, providing a broader perspective on the company's financial health and market position.
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