{"id":22896,"date":"2023-09-28T12:48:25","date_gmt":"2023-09-28T12:48:25","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/tesla-stock-is-dropping-third-quarter-deliveries-arent-its-biggest-problem\/"},"modified":"2023-09-28T12:48:26","modified_gmt":"2023-09-28T12:48:26","slug":"tesla-stock-is-dropping-third-quarter-deliveries-arent-its-biggest-problem","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=22896","title":{"rendered":"Tesla Stock Is Dropping. Third-Quarter Deliveries Aren’t Its Biggest Problem."},"content":{"rendered":"
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Deutsche Bank analyst Emmanuel Rosner cut his price target on Tesla stock to $285 from $300.<\/h4>\n


\n John Thys\/AFP via Getty Images
\n <\/span>
\n <\/figcaption><\/figure>\n<\/p><\/div>\n

Analysts are focused on Tesla\u2019s third-quarter deliveries, and lowering estimates. That is unnerving investors. Both groups, however, might want to look a little farther down the road because the outlook for 2024 may be deteriorating.<\/p>\n

Wednesday, Deutsche Bank analyst Emmanuel Rosner kept his Buy rating on
\n Tesla
\n stock (ticker: TSLA) but cut his price target to $285 from $300. Many of his peers have been worried about a third-quarter delivery miss. A bigger worry drove his target-price reduction, however.<\/p>\n

\n

\u201cTesla\u2019s 3Q 2023 deliveries and production could miss Street expectations, but more important, we see meaningful downside risk to 2024 consensus due to limited volume growth next year,\u201d wrote Rosner. <\/p>\n

His estimate for third-quarter deliveries is now 440,000 units, down from 455,000 units. That is more drastic than the new consensus estimate for 462,000 units, down from 473,00 units a few weeks ago, according to FactSet.<\/p>\n

Tesla delivery estimates get trimmed coming to the end of most quarters, but these third-quarter cuts are larger than in the past. Planned plant downtime to change tooling for an upgraded Model 3 is the main reason Rosner and other analysts cite for all of the recent cuts.<\/p>\n

A weak quarter certainly matters, but the bigger issue is the 2024 demand. <\/p>\n

\u201cTesla indicated recently at our [Munich auto show] investor meetings that it is no longer planning to expand output at Austin and Berlin factories to 10,000 per week, providing only incremental volume from these two factories next year as well as minimal contribution from the Cybertruck with slower and more complex ramp-up of the vehicle,\u201d wrote Rosner. \u201cOur base case now is for Tesla to guide to about 2.1 million deliveries next year, versus current consensus of 2.3 million units.\u201d <\/p>\n

Rosner\u2019s cut amounts to about 9% of prior 2024 estimates. Excluding his reduction, the consensus 2024 estimate on Wall Street has barely budged, down about 40,000 units, or 2%, over the past few weeks. <\/p>\n

Falling estimates, weak production growth, and weak Cybertruck deliveries in 2024 aren\u2019t what investors want to hear. Tesla\u2019s goal is to grow volumes at 50% a year on average for the coming few years. Next year\u2019s growth would be less than 20% at 2.1 million units. Deliveries are expected to be about 1.8 million units for 2023, up roughly 40% compared with 2022. <\/p>\n

\u201cOn the bright side, with the company not trying to push as much volume, there could potentially be less pricing pressure next year,\u201d added Rosner. <\/p>\n

Tesla cut prices aggressively to start 2023, partly to drive demand growth according to CEO Elon Musk. Investors would like to see prices stabilize. They would also like to see higher demand for Tesla electric vehicles. <\/p>\n

Rosner still rates shares Buy. He sees 2024 as a risk for the stock, but \u201clonger term, the next-gen vehicle is a game changer for the industry,\u201d Rosener told Barron\u2019s<\/em>, adding that it is critically important that the next-generation, lower-cost vehicle arrives on the market in 2025. <\/p>\n

Investors typically think of the next-gen vehicle as a smaller Model 3 or Y and refer to it as the Model 2 even though there is no official name. The Model 2 is supposed to open up more of the auto market to Tesla and be a vehicle platform that can sell millions of cars a year. <\/p>\n

Overall, about 41% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the
\n S&P 500
\n is about 55%. A year ago the average Buy rating ratio was about 64%. Price cuts and rising interest rates have sapped some analyst enthusiasm for Telsa stock. <\/p>\n

The average analyst price target is about $258 on Tesla stock. A year ago it was about $318. <\/p>\n

Tesla stock closed down 0.8% at $242 a share, while the
\n S&P 500
\n finished flat and
\n Nasdaq Composite
\n rose 0.2%. <\/p>\n

Coming into Wednesday trading, Tesla stock was up about 98% year to date, but it is down about 13% over the past 12 months. The S&P 500 and
\n Nasdaq Composite
\n were up about 17% and 21%, respectively, over the past 12 months. <\/p>\n

Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Deutsche Bank analyst Emmanuel Rosner cut his price target on Tesla stock to $285 from $300. John Thys\/AFP via Getty Images Analysts are focused on Tesla\u2019s third-quarter deliveries, and lowering estimates. That is unnerving investors. Both groups, however, might want to look a little farther down the road because the outlook for 2024 may be<\/p>\n","protected":false},"author":1,"featured_media":22897,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-22896","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nTesla Stock Is Dropping. Third-Quarter Deliveries Aren't Its Biggest Problem. | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"Deutsche Bank analyst Emmanuel Rosner cut his price target on Tesla stock to $285 from $300. 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