Summary:
- Deutsche Bank maintains a Buy rating on Tesla with a $260 price target after a strong Q4, but flags substantial risk to earnings in 2024.
- Tesla delivered 485k vehicles in Q4, hitting its annual target, but Deutsche Bank anticipates lower deliveries in 2024 (2.1M vs. market estimates above 2.5M).
- Pricing pressures, potential Cybertruck margin struggles, and a higher China tax rate contribute to the lowered forecast.
- Long-term focus remains on Tesla’s next-generation platform, though launch timing and capacity are unclear.
- Deutsche Bank slightly adjusted its Q4 EPS estimate to align with consensus.
- TSLA stock fell slightly in pre-market trading.
Key Points:
- Downside risk for 2024: Deutsche Bank believes Tesla’s delivery guidance could be significantly lower than market expectations, raising concerns about earnings.
- Multiple challenges: Pricing pressures, potential Cybertruck margin issues, and higher Chinese taxes are seen as headwinds.
- Shifting long-term goals?: Deutsche Bank raises the possibility of Tesla revising its ambitious 50% annual volume growth target.
- Next-generation platform focus: Investors await details on the timing and production capacity of this crucial upcoming platform.
- Neutral short-term view: Deutsche Bank maintains a Buy rating and slightly increased its Q4 EPS estimate, suggesting a neutral near-term outlook.
Potential Implications:
- The lowered 2024 delivery forecast could dampen investor sentiment and put pressure on TSLA stock.
- The next-generation platform remains a key driver of long-term growth, but uncertainty around its launch adds an element of risk.
- Tesla’s ability to navigate pricing pressures and maintain margins in key markets like China will be crucial for its performance.
Conclusion:
While Deutsche Bank acknowledges Tesla’s strong Q4 and maintains a Buy rating, their cautionary outlook for 2024 due to multiple headwinds raises concerns for investors. The key uncertainties surrounding the 2024 delivery forecast, the Cybertruck’s impact, and potential long-term goal adjustments require further clarity from Tesla to solidify confidence in its near- and long-term prospects.t