JPMorgan says 40% of Tesla earnings at risk from regulatory backdrop

JPMorgan says Tesla’s (TSLA) Q4 sales and production figures tracked in line with the firm’s estimates but below consensus, implying further risk to 2024 earnings per share expectations, which have already fallen 36% over the past year to “just” $2.43 from $3.85. This threatens the stock’s sharp post-election rally, contends JPMorgan, which notes 2024 earnings per share estimates are 67% below the $7.30 level it stood at as recently as 2022 when the shares were much lower. Tesla “appears to have the most to lose from the shifting regulatory backdrop,” perhaps as much as $3.2B or 40% of the 2024 consensus EBIT estimate of $8.3B, given a $1.2B headwind from the Clean Vehicle Credit expiration and a $2B headwind from the California Air Resources Board’s zero-emission vehicle credit sales, the analyst tells investors in a research note. JPMorgan keeps an Underweight rating on Tesla shares with a $135 price target