Tesla Analyst’s Revised Outlook
As Tesla, Inc. gears up to disclose its first-quarter deliveries update, Wedbush analyst Daniel Ives upheld his bullish perspective but dialed down the price target for the stock from $315 to $300.
Challenges Abound
Highlighting a dual challenge situation, Ives pointed to demand and supply-related obstacles that have plagued Tesla in recent times. The first quarter, as per Ives, has unfolded as a nightmare, with soft demand in China, production disruptions, and supply chain issues stemming from factory downtimes and the Berlin incident.
China’s Thorny Competition
Ives underscored the escalating competition in China as a major concern for Tesla and its stakeholders. A persistent price war and mounting rivalry have made the Chinese market formidable territory for the company in recent times. Ives mentioned that the target of 2.1 million units for the year may now be more realistically aimed at 2 million units.
Negative Narrative Unfolding
Anticipating the looming first-quarter delivery figures, Ives painted a somber picture, suggesting that this period might not be met with applause from Tesla proponents. The sluggish growth, margin pressure, and China-related hurdles have contributed to a negative narrative surrounding Tesla. Ives remarked that this critical juncture signifies a make-or-break moment for Musk as the darker days could loom ahead otherwise.
The Road Ahead
Looking ahead, Ives expressed confidence in Tesla’s long-term prospects, especially banking on the Full Self-Driving (FSD) and autopilot strategy. He stressed the importance of these elements in sustaining Tesla’s disruptive tech narrative and shoring up its valuation support.
Recommendations For Tesla
- Tesla should provide formal guidance on margins and deliveries for 2024.
- Conduct a detailed Q1 conference call addressing China demand challenges and outlining strategic remedies.
- Host a battery/AI day to elucidate the company’s roadmap and monetization avenues for the coming years.
- Musk should commit to leading Tesla and its AI pursuits for the next 3-5 years.
- Initiate a robust advertising campaign to bolster Tesla’s reach.
Final Thoughts
In a culmination of insights, Ives maintained his optimistic stance on Tesla’s future trajectory. While acknowledging the trying period the company faces, he emphasized the pivotal nature of navigating through this turbulent phase for Musk and the Tesla team.
Stock Performance
Tesla’s stock closed Wednesday’s trading session with a 1.22% gain, priced at $179.83. However, year-to-date, the stock has witnessed a decline of nearly 28%.
Source: Benzinga Pro
