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There’s no way around it, as the first quarter of 24 is about to close, this has been a terrible quarter Tesla (NASDAQ:TSLA). This has been evident on both sides of the supply and demand equation. The planned factory shutdown and a fire next to the Berlin factory have affected supply, exacerbated by issues with the Model 3 Highland upgrade in the US, but it’s not like consumers are queuing up for new ones obtain vehicles.

Like the rest of the industry, Tesla has faced declining demand and its first quarter delivery estimates have now been lowered from 475,000 to 425,000. All other concerns are being trumped by the trends seen in China’s highly competitive key market, and that has even one of the biggest Tesla bulls on the street thinking it’s time to reassess the EV giant’s prospects. judge.

Wedbush’s five-star analyst Daniel Ives says it’s time for a reality check.

“Chinese demand remains very weak into 2024,” Ives said. “Over the last two weeks, soft delivery data is now adopting 2.1 million units for the year as a baseline, with 2.0 million a more realistic target for 2024 and our numbers are falling accordingly. We now estimate that Chinese shipments are down 3%-4% year-over-year this quarter. We expect first quarter delivery numbers next Tuesday morning and this will not be a celebratory moment for the bulls, but instead a band-aid quarter for Tesla investors.”

Right now, Ives says, Tesla’s story is as bad as it’s ever been, but unlike in the past, the current negative sentiment “is justified because growth has been slow and margins that compression with China as a nightmare show.”

While Ives remains generally confident in the company’s FSD/autopilot strategy and “remains optimistic about Tesla for years to come,” he nonetheless admits that investor patience is “wearing very thin.” “This is compounded by the Musk AI beyond the Tesla chatter, governance issues, the Delaware Musk company, and now a likely move to incorporate into Texas,” he explained.

According to Ives, to turn the situation around, Tesla and Musk must implement the following measures: 1) Provide a clear set of guidelines for margins and deliveries in 2024; 2) Hold a Q1 conference call addressing China’s demand challenges and strategy to reverse the decline, 3) Host a battery/AI event and outline the roadmap and monetization plan for the coming years, 4) Musk must promise to remain CEO of Tesla for the next three to five years, focusing on its AI initiatives and 5) Launch a real advertising campaign.

Ives thinks the current situation warrants a lower price target, which he lowers from $315 to $300. Still, there is a potential upside of 70% over current levels. Ives’ rating remains an Outperform (i.e. Buy). (To view Ives’ track record, click here)

Turning our attention to the rest of the Street, TSLA is backed by eight other analysts who also rate the stock as a Buy, while nineteen suggest a Hold and seven recommend a Sell. This results in an overall consensus rating of Hold. With an average target of $198.72, the stock is expected to deliver a 13% return over the next year. (To see Tesla stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important to do your own analysis before making an investment.

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