Deutsche Bank analysts have painted a sobering picture for Tesla (NASDAQ: TSLA) in the first quarter, forecasting a significant underperformance in deliveries and earnings compared to current Street expectations.
In a note released Monday, the bank warned of material downside risk to the full-year 2024 consensus, citing constraints on volume growth and mounting pressure on profitability from price cuts. Deutsche Bank maintains a Buy rating on Tesla shares with a price target of $218.
Deutsche Bank said,
“For Q1, we lower our deliveries estimate to 427k units, down from 476k units prior due to low Model 3 production in the U.S. since Highland refresh, particularly slow Cybertruck ramp up, and overall pressure globally from weak EV demand.”
Analysts also slashed their estimate for full-year deliveries to 1.96 million units, falling short of the consensus figure of 2.1 million.
The bank highlights concerns over Tesla’s margins and earnings, particularly in light of announced price cuts in China and Europe earlier in the quarter, with further moderate price adjustments in February to stimulate sales.
Deutsche Bank stated,
“The slower ramp up in Model 3 in the U.S. and earlier factory shut down as well as the recent arson attack at the Berlin facility will impact factory efficiency gains, and with the new labor costs and margin dilutive Cybertruck coming online at the start of 2024, we expect Q1 margin to slide deeper on a q/q basis, with limited room for improvement throughout the year.”
Tesla (NASDAQ: TSLA) Stock Price Action
TSLA stock rose 1.39% to close at $177.77 on Monday. The traders had exchanged hands with 85,035,977 (85.03 million) shares compared to the average daily trading volume of 108.06 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
