Tesla Bull Rues 'Train Wreck' Earnings Call, Slashes Price Target By 10%: 'Dead Wrong Expecting Musk And Team To Step Up Like Adults In The Room'

Tesla, Inc. TSLA uber-bulls appear to be throwing in the towel, with two of them tempering their expectations for the electric-vehicle giant in the wake of a double miss in the fourth quarter.

A Shaky 2024 Ahead: Wedbush analyst Daniel Ives expressed disappointment with the earnings call. 

“We were dead wrong expecting [Elon] Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand,” he said.

“Instead, we got a high-level Tesla long-term view with another train wreck conference call.”

Musk was much more cautious and chose to steer the discussion around production, next-gen vehicle timelines, and FSD/investments, the analyst said. The much larger Tesla story gleaned from the call was the 2024 unit growth likely coming in notably lower, and a lack of guidance on margins/expense structure.

Ives, however, is optimistic about the long-term outlook. “The long-term story is intact for Tesla, and we truly believe EV adoption to a much broader mass market is around the corner, with AI/FSD the future.”

The “near-term Category 4 hurricane” around price cuts and a lack of granularity, guidance, and communication, the analyst said, is a bitter pill to swallow for the bulls.

On a positive note, the analyst noted that the gross margin, excluding regulatory credits, came in at 16.9%, ahead of the consensus of 15.9%. The metric increased sequentially from 16.3% in the third quarter, he said, adding that it remains a slippery issue.

“Musk also reiterated his controversial 25% voting control comment on the call,” Ives said.

Wedbush expects 2024 production to come in around 2.1 million units, marking unit growth of about 17%.

“While the long-term bull thesis for Tesla is built around disruptive tech, its supercharger network, 4680 advancements, FSD debuts, AI, Dojo, Optimus, and a sub-30k ‘Model 2’ we expect to be formally announced later this year, for now, it’s truly betting on Musk to navigate this storm,” Ives said.

The analyst maintained an Outperform rating but reduced the price target from $350 to $315.

See Also: Everything You Need To Know About Tesla Stock

Black Lowers Estimates: Future Fund’s Gary Black echoed a similar sentiment. The Tesla management’s decision not to provide 2024 production guidance and the uncertainty about the 2024 pricing philosophy and tax could trigger further weakness, the fund manager said.

“Elon's negative comments about high interest rates and car payments being too high will cause more pricing uncertainty,” Black said.

Listing the other notable points from the call, Black said Musk said Cybertruck demand was off the hook and that the $25,000 next-gen EV will likely enter production in late 2025 in Austin. Optimus’ first deliveries could begin in 2025, the fund manager said.

Regarding the lack of guidance, Black said, “My sense is that Elon likely decided not to provide FY'24 guidance because CEOs generally hate providing guidance and Zach's departure gave him an excuse to not provide annual guidance going forward.”

“I don't sense demand issues.”

Black lowered his 2024 adjusted earnings per share estimate for Tesla by 9% to $3.40.

In premarket trading on Thursday, Tesla fell 8.23% to $190.73, according to Benzinga Pro data.

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