On Wednesday, Jefferies, a global investment banking firm, adjusted its price target for Tesla (NASDAQ:TSLA), the electric vehicle manufacturer, to $165 from a previous target of $185. The firm has chosen to maintain its Hold rating on the stock.
The adjustment follows concerns raised by Jefferies about Tesla's first quarter results, which have been shrouded in uncertainty due to questions about the company's product priorities and leadership. The firm has revised its full-year earnings before interest and taxes (EBIT) and earnings per share (EPS) estimates downwards by approximately 30%, setting them at $6.5 billion and $1.87 respectively.
Jefferies anticipates that Tesla's cash burn in the first quarter will be significantly negative. Despite this, the firm believes that the financial situation is not dire enough to cast doubt on Tesla's ability to fund its business ventures, which are essential to supporting the company's current stock multiples.
The upcoming Annual General Meeting (AGM) is highlighted as a potential turning point that could influence executive compensation, board responsibility, and the role of Tesla's CEO, Elon Musk. The firm's stance remains neutral, with a revised price target that reflects the latest analysis of the company's financial prospects and operational challenges.
InvestingPro Insights
As Tesla navigates through a period marked by financial scrutiny and operational challenges, real-time data from InvestingPro offers additional context. Tesla's market capitalization stands robust at $563.33 billion, asserting its significant presence in the automobile industry. Despite concerns over its earnings, Tesla's revenue growth remains positive, with an 18.8% increase over the last twelve months as of Q1 2023, and a more modest quarterly growth of 3.49% in Q1 2023.
InvestingPro Tips reveal that Tesla holds more cash than debt on its balance sheet, which may provide some reassurance to investors concerned about the company's financial health. Additionally, Tesla's cash flows can sufficiently cover interest payments, indicating a degree of financial flexibility. For readers interested in a deeper dive into Tesla's financial metrics and strategic positioning, InvestingPro offers 20 additional tips that can be accessed at https://www.investing.com/pro/TSLA. To enrich your investment strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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