Tesla Faces Uncertain 2024 After Disappointing Earnings, Wall Street Slashes Profit Projections

San Francisco, CA – Wall Street analysts have significantly reduced profit projections for Tesla in 2024, following a cautious outlook provided by CEO Elon Musk. The electric vehicle (EV) giant’s tempered forecast, with few specifics, caused a sharp decline in Tesla’s stock on Thursday.

Tesla’s fourth-quarter earnings and revenue fell short of expectations, leading to criticism from longtime Tesla bull Dan Ives, who described the company’s conference call as a “train wreck.” In its report, Tesla acknowledged that its vehicle volume growth rate for 2024 might be lower than the previous year due to the focus on launching the next-generation vehicle at Gigafactory Texas.

The company emphasized that it is currently transitioning between two major growth waves: the global expansion of the Model 3 and Model Y vehicle platform and the upcoming global expansion of the next-generation vehicle platform. Musk expressed optimism about Tesla’s future, highlighting the importance of executing well on its next-generation vehicle, energy storage, full self-driving technology, and other projects.

However, the lack of specific details regarding Tesla’s pricing strategy, profit margins, and overall profit expectations for 2024 caused Wall Street to revise profit views downward. Tesla’s stock dropped 9% to $189.50 during Thursday’s market trading.

Analysts now project Tesla’s earnings per share (EPS) for 2024 to be $3.38, down from the previous estimate of $3.63 per share. The consensus view represents a 12% decrease from the end of 2023 and a 40% decline since January 2023. It is also significantly below Tesla’s 2022 levels.

Ives, the Wedbush analyst, criticized Tesla’s lack of transparency and strategic insight during the conference call, leading him to lower his price target for the company from $350 to $315. He also noted the potential for more vehicle price cuts and margin pressure as Tesla prepares for the launch of its next-generation vehicle platforms and deals with fluctuating demand.

Other analysts expressed similar concerns. Morgan Stanley’s Adam Jonas described Tesla’s 2024 outlook as the least detailed in recent memory, suggesting that profitability could decline to $2 per share. Bernstein analyst Toni Sacconaghi highlighted the challenging year ahead for Tesla in 2024 and questioned whether 2025 would be any better.

Tesla’s stock performance has been underwhelming. It recorded a 16.4% decline in January and has experienced five consecutive weekly drops. The stock recently fell below both the 50-day and 200-day moving averages, reaching its lowest levels since May.

Despite these challenges, Tesla had an impressive year in 2023, outperforming the broader market. The company’s stock is currently ranked fifth in the Auto Manufacturers industry group by Investor’s Business Daily (IBD), with a Composite Rating of 61 out of 99, a Relative Strength Rating of 68, and an EPS Rating of 88.

In conclusion, Tesla’s cautious outlook for 2024, coupled with disappointing fourth-quarter earnings, has led to a downward revision in profit projections by Wall Street analysts. The lack of specific details and uncertainty surrounding Tesla’s pricing strategy and profit margins have raised concerns among investors and analysts alike. The company’s stock has suffered as a result, and it remains to be seen how Tesla will navigate the challenges ahead.