Wall Street slashed 2024 profit projections Thursday, with even long-term bulls critical, with Tesla headed for a difficult 2024 after the EV giant and CEO Elon Musk offered a tempered outlook with few specifics late Wednesday. TSLA stock plunged.
Tesla reported worse-than-expected fourth-quarter earnings and revenue Wednesday, following it with a conference call that longtime Tesla bull Dan Ives summed up as a "train wreck."
Tesla reported Wednesday that in 2024 its "vehicle volume growth rate may be notably lower than the growth rate achieved in 2023 "as our teams work on the launch of the next-generation vehicle at Gigafactory Texas."
The EV giant added that it is "currently between two major growth waves," with the "global expansion" of the Model 3 and Model Y vehicle platform "and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform."
"There's lots to look forward to in 2024," Musk said on the earnings call Wednesday. He added that Tesla is focused on ensuring that its next-generation vehicle, energy storage, full self driving and "other projects" are "executed as well as possible."
However, without any specifics and no word on its vehicle price cutting strategy or what way profit margins are expected to go in 2024, Wall Street cut profit views Thursday.
Tesla stock dived 12% to 182.63 in Thursday's market action. TSLA shares are down nearly 14% on the week and more than 26% in January.
Tesla Bulls Wary Of 2024
The consensus among analysts for 2024 has Tesla EPS down to $3.31 as of Thursday afternoon. Before Q4 earnings, Wall Street had Tesla 2024 earnings at $3.63 a share. The consensus view is now 12% below where it was at the end of 2023 and has come down 40% since the end of January 2023. The current forecast is well below Tesla's 2022 levels.
"We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure and fluctuating demand," the Wedbush analyst wrote Thursday. "Instead we got a high level Tesla long term view with another train wreck conference call."
Ives cut his Tesla price target to 315, down from 350. The analysts added that Musk did not rule out more vehicle price cuts and that margins could come under pressure as Tesla looks to launch its next-gen vehicle platforms, scale up Cybertruck production and deal with EV demand.
Meanwhile, Morgan Stanley analyst Adam Jonas, another Tesla bull, wrote late Thursday that the 2024 outlook was the "least detailed we remember" and that Tesla profitability could drop toward the $2 per share level.
"Investors and analysts are very much 'on their own' when it comes to the FY202 revenue and growth outlook," Jonas wrote.
Meanwhile, Bernstein analyst Toni Sacconaghi noted Thursday that 2024 will be a challenging year for Tesla and that it is becoming "increasingly apparent that 2025 will likely not be better."
Musk said that the next-generation EV should start production in late 2025, but admits his timelines are often "optimistic."
Stocks Rise Even As Tesla Triggers Bearish Signals; Intel Tumbles Late
Tesla Earnings: Stock Performance
The stock has crashed 26.5% in January so far. Last week, Tesla stock fell 3% for its fifth straight weekly decline. In the last two weeks, TSLA has tumbled below the 50-day and 200-day lines.
Shares are at their lowest levels since May.
The relative strength line, which tracks a stock's performance vs. the S&P 500, is at a one-year low, according to MarketSmith.
In 2023 Tesla doubled, easily outperforming the broader S&P 500 index. Tesla stock ranks fifth in the 35-member IBD Auto Manufacturers industry group. The stock has a 61 Composite Rating out of a best-possible 99. Tesla stock also has a 68 Relative Strength Rating and an 88 EPS Rating.
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