© Reuters. 2024 ‘seems powerful’ for Tesla (TSLA), based on Bernstein
2024 for Tesla (NASDAQ:) seems powerful, based on analysts at Bernstein, who mentioned they consider the electrical automobile large will see decrease margins and disappoint in volumes.
In a notice, the funding agency said that Tesla’s This autumn deliveries of 485,000 had been broadly according to the sell-side consensus of 480,500, bringing full-year 2023 deliveries to 1.81 million, according to firm steering.
Nevertheless, they notice that auto gross margins ex-credits are a key query. “We model 15.7% vs consensus of 17.8% but see potential downside given the impact of price cuts in September and October as well as significant discounting of “stock” models in the quarter,” analysts at Bernstein, who’ve an Underperform score and $150 value goal on the electrical automobile large.
“Mechanically flowing through Q4 price cuts (off list and inventory) to the P&L would imply a sequential ASP decline of 250 to 400 bps while consensus is modeling for a 0.5% decrease,” they added.
For FY 24, Bernstein is beneath consensus on deliveries (2.15M vs. 2.2M) and on EPS ($2.59 vs. $3.31). The agency doesn’t consider Tesla can additional lower costs sufficient to drive adequate demand elasticity with out doubtlessly changing into free money move (FCF) unfavorable.
“Moreover, Tesla’s models will be one year older in 2024, penetration will be higher, and Cybertruck will be an estimated 100 bps headwind to auto GMs,” the analysts commented.
“The stock now trades at ~200x trailing TTM FCF, and nearly100x EPS, which is out of whack relative to higher margin growth tech companies,” they added. “Moreover, we believe more investors will begin to increasingly question the company’s growth narrative, particularly since we believe that Tesla will struggle to grow deliveries 20% in 2024 (and 2025).”