Musk’s comments pushed Tesla shares higher
2023.01.26 09:38
Musk’s comments pushed Tesla shares higher
By Tiffany Smith
Budrigannews.com – According to one analyst, Tesla’s (NASDAQ:) Both bulls and bears found something in the fourth-quarter report. However, the bulls are currently winning based on the +7% price action Thursday morning.
Elon Musk, CEO, has stated that significant demand has been sparked by recent price cuts, which boosts the upside. Following the results, Wall Street has raised at least two price targets for the stock, and no price targets have been lowered yet.
Wedbush reiterated its Outperform rating while raising the price target from $175 to $200.
It claimed that Musk and co. delivered in “epic fashion with demand that is currently 2x production coming out of the gates in 2023 and laying out a 1.8 million delivery bogey for the year,” which was “exactly what the bulls wanted to hear and the bears (for now) will go back into hibernation mode.” The earnings call was referred to as “Tesla’s Super Bowl” during the conference call.
In addition, Wolfe Research increased the Outperform-rated stock’s price target from $160 to $185, stating that growth is re-accelerating and advantages over rivals appear to be expanding.
Bernstein analysts argued that auto gross margins were significantly lower than anticipated in the bear camp. They note that EV credits are excluded at 24.3%, and a one-time FSD revenue recognition is also excluded at 23.1%. This contrasts with the 26.4% consensus.
The analysts added:
“Most notably, these margins were prior to the real price cuts beginning earlier this month.”
Given that price cuts point to a $5000+ reduction in gross profit dollars sequentially, auto gross margins ex-credits could almost certainly be below 20% for some quarters in 2023 with an incremental price reduction of 10% YTD.
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