Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Bulls win Tesla 'Super Bowl' on demand as bears focus on plunging gross margins

Published 01/26/2023, 08:14 PM
© Reuters.
TSLA
-

By Investing.com Staff

As one analyst put it, Tesla's (NASDAQ:TSLA) fourth-quarter earnings report had something for bulls and bears. However, based on the +7% price action Thursday morning, the bulls are winning currently. Contributing to the upside are comments from CEO Elon Musk that the recent price cuts have stirred significant demand. The stock has at least two price target hikes on Wall Street following the numbers and no price target cuts have been reported yet.

Wedbush lifted its price target to $200 from $175, while reiterating an Outperform rating. It said the earnings call was "Tesla's Super Bowl", with Musk & Co. delivering in "epic fashion with demand that is currently 2x production coming out of the gates in 2023 and laying out a 1.8 million delivery bogey for the year which was exactly what the bulls wanted to hear and the bears (for now) will go back into hibernation mode."

Wolfe Research also raised its price target on the Outperform-rated stock - to $185 from $160 - saying growth is re-accelerating and advantages versus peers appear to be widening.

In the bear camp, Bernstein analysts highlighted that auto gross margins were much worse than anticipated. They note - 24.3% excluding EV credits and 23.1% also excluding a one-time FSD revenue recognition. This versus the consensus of 26.4%.

"Most notably, these margins were before the real price cuts kicked in earlier this month," the analysts added. "With ~10%+ incremental price reduction YTD, auto gross margins ex-credits could certainly be sub-20% for some quarters in 2023 (given the price cuts point to a $5000+ reduction in gross profit dollars sequentially)."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.