Why This Tesla Analyst Is Lowering Their Price Target After Q4 Delivery Miss

Electric vehicle giant Tesla Inc TSLA reported fourth-quarter production and delivery figures over the holiday weekend. Analysts are weighing in on what the figures from Tesla mean for the electric vehicle company moving forward.

The Tesla Analyst: Goldman Sachs analyst Mark Delaney reiterated a Buy rating on Tesla and lowered the price target from $235 to $205.

The Analyst Takeaways: For the fourth quarter, Tesla reported around 405,000 vehicle deliveries and 440,000 vehicles produced. The total came in below what many analysts had forecasted. Deliveries up 31% year-over-year also fell lower than the 50% long-term goal from the company.

“We consider the 4Q22 delivery report to be an incremental negative, although we continue to see Tesla as well positioned for long-term growth given its position as a cost and full solution leader in clean mobility/electric vehicles,” Delaney said.

Delaney noted that Tesla previously guided for “a little under 50% delivery growth” during its third-quarter earnings call.

“We believe key debates from here will be on whether vehicle deliveries can reaccelerate, margins, and Tesla’s brand. All three of these issues will be important to monitor.”

The delivery total in the fourth quarter came in below Goldman Sachs’ reduced estimate.

“Making vehicles more affordable for consumers in light of the more difficult macro/higher interest rates, either from the prices Tesla charges and/or new government programs like the IRA, will be a key driver of growth in our opinion.”

The analyst also notes that increased production from newer factories could help improve costs to consumers.

“The degree to which these levers will help volume, and the cost to Tesla’s margins to achieve them, will be a key to monitor.”

Delaney lowers earning per share estimates for 2023 from $4.50 to $4.00.

TSLA Price Action: Tesla shares are down 12% to $108.20 on Tuesday.

Read Next: Is Tesla's Q4 Delivery Miss Cause For Concern? 

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