Tesla (NASDAQ: TSLA) is set to report earnings after the close on Wednesday, January 25, and with the stock struggling over the last year or more, investors and analysts will be focused on the company’s outlook for the year ahead.
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The electric vehicle giant has had to contend with strong headwinds such as rising costs, Covid-19-related disruptions in China, and Elon Musk’s focus on Twitter in the last 12 months, sending its stock lower, now down 56% in the last 12 months.
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However, with a 21% rise so far in 2022, investors will be hoping the company’s most recent quarter and outlook are enough to kickstart another rally in the stock. Ahead of its earnings release, analysts at Deutsche Bank, Oppenheimer, and Piper Sandler, provided their thoughts.
Deutsche Bank analyst Emmanuel Rosner cut his firm’s price target on Tesla to $220 from $250 in a note last week, maintaining a Buy rating on the stock.
The analyst told investors he expects mixed fourth-quarter earnings and 2023 guidance season for US automakers. In addition, he believes several companies could miss quarterly consensus estimates, and most of them are likely to issue cautious 2023 guidance due to ongoing choppy industry conditions and macro uncertainty.
Elsewhere, Oppenheimer’s Colin Rusch said in his note to clients last week that with Tesla resetting prices — the EV leader cut prices for some of its vehicles in various regions — expectations for its commentary on its fourth-quarter results call are shifting quickly.
Rusch believes Tesla is making a proactive move to capture incentives but is also cutting prices in key markets to protect its market position and apply pressure on competition from a cash flow perspective. Furthermore, the analyst feels the core issue on Tesla shares is whether the Elon Musk-led company can continue to grow while maintaining premium margins for both GM and OM. All in all, Rusch anticipates mixed trading on Tesla shares will continue as EV competition begins to play out.
Finally, Piper Sandler cut its price target on Tesla to $300 from $340, keeping an Overweight rating on the stock ahead of its earnings release. Analyst Alexander Potter said that while Tesla took longer than expected to cut prices, the valuation has now been reset, and he recommends proactively buying the stock. The analyst believes Tesla can easily achieve over 50% delivery growth in 2023 and “wouldn't be shocked” if margins surprise to the upside.
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