The year’s first quarter is almost over, and it doesn’t look like it has been all that great for Tesla (NASDAQ:TSLA). Apart from downtime at its Berlin factory, due both to supply disruptions related to the Red Sea conflict and a power outage following a suspected arson attack nearby, the data on offer provides little comfort.
According to third party data (CPCA and Motor Intelligence), while delivery estimates in major regions for the first two months of the quarter show a high single-digit increase compared to the same period last year, they plummet to low double digits sequentially.
This downturn has prompted Goldman Sachs analyst Mark Delaney to reassess his projections.
“While the data on regional volumes are not final (and are estimates especially in the US), this data suggests in our view that volumes are tracking lower than our prior 475K estimate (up 12% yoy and down 2% qoq),” said the 5-star analyst.
Delaney now sees Q1 deliveries reaching 435,000 vehicles and expects 2024 deliveries of 1.98 million (up 9.5% year-over-year) vs. 475,000/2.08 million, respectively, beforehand.
Although Delaney concedes the monthly data is preliminary, there’s also a suggestion of slower sales from other datapoints. Per Sensor Tower, when comparing the first two months of the year vs. 4Q23, downloads of the Tesla app in the US and in Europe have dropped. Moreover, year-to-date, app downloads in the US have declined against 1Q23. Additionally, in total, China factory exports fell year-over-year in January and February.
As such, driven mainly by lower vehicle deliveries and hence lower revenue, Delaney has reduced his EPS estimates (including SBC) for 2024/2025/2026 from $2.45/$4.40/$5.40 to $2.15/$3.80/$5.00.
“While we continue to believe that Tesla is well positioned for longer-term growth given its strong position in the EV and clean energy markets (which we attribute to factors including its ability to offer full solutions such as charging, storage, software/FSD and services, and with a leading cost structure), we believe that softer near-term EV market conditions are weighing on earnings,” the Goldman analyst explained.
To this end, Delaney has also lowered his price target on TSLA from $220 to $190, although the new figure still represents one-year upside of 9% from current levels. The analyst’s rating stays a Neutral. (To watch Delaney’s track record, click here)
Delaney’s stance gets the backing of most of his colleagues. Based on 18 Hold ratings, 10 Buys and 6 Sells, the stock claims a Hold consensus rating. Nevertheless, most analysts see upside here; the forecast calls for 12-month returns of 19.5%, considering the average target stands at $207.74. (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 intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
