Analyst Maintains Positive Outlier Position on Tesla
Morgan Stanley analyst Adam Jonas remains bullish on electric vehicle behemoth Tesla Inc with a $345 price target, despite cautioning of a potential decline in volume growth rate for 2024.
Analyst’s Perspective on Tesla’s Q4 Earnings Call
Jonas remarked that Tesla’s latest financial results and subsequent conference call did little to alter the prevailing bearish market sentiment. He expressed concern that the stock price could continue to face downward pressure if the company fails to restore confidence in its growth prospects.
While Tesla indicated a significant reduction in volumes for 2024 compared to the previous year, it refrained from providing specific percentage figures. Jonas anticipates a delivery growth of 15% in 2024, a substantial drop from the 38% growth achieved in 2023.
However, Jonas is not discounting the company’s stock price, citing potential AI developments throughout the year and a projected capital expenditure of at least $10 billion in FY24, surpassing the analyst’s estimate of approximately $8.5 billion.
During the earnings call, Tesla’s CEO Elon Musk hinted at a possible update on AI later in the year.
Revised Estimates and Price Action
While maintaining the $345 price target, Jonas lowered the revenue estimates for Tesla in FY24 to $106 billion due to a projected decrease in auto revenue. Nonetheless, the analyst foresees a slightly higher automotive gross profit of $13.3 billion and anticipates a marginally increased operating margin, with FY24 at 5.9% and FY25 at 8.3%.
Tesla shares closed down by 0.6% at $207.83 on Wednesday, with a subsequent after-hours decline of approximately 6%.
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