Tesla Analyst Slashes Price Target By Over 12% To Reflect Macro Headwinds

Mizuho analyst Vijay Rakesh maintained Tesla Inc TSLA with a Buy rating but lowered the price target from $285 to $250.
TSLA reported December quarter deliveries of 405.3k vehicles (below consensus 418.0k) though mostly expected with the week-long Shanghai shutdown.
For the full-year 2022, total deliveries were 1.31M units, up 40% Y/Y, while overall production was up ~47% Y/Y, in line with previous TSLA commentary.
TSLA noted an increase in cars in transport exiting the December quarter.
However, Rakesh believes concerns remain around a weakening consumer driven by rising interest rates and broader macro concerns, which could continue to be a 1H23E headwind.
The analyst also noted a critical one-week shutdown at the Shanghai factory (45%+ of TSLA annual capacity)
Rakesh believes the December quarter top line could see challenges, with price cuts in both China (~9-10%) starting in October and the U.S., with ~$7,500 discounts on the Model 3/Y in the month of December.
However, introducing the Inflation Reduction Act with certain Model 3/Y's now qualifying for the $7,500 credit could create a significant tailwind, the analyst noted.
In addition, TSLA is beginning to ramp the Semi, with deliveries starting in December, though Rakesh believes volumes are currently low, while the Cybertruck is likely for a mid-2023 production start.
Competition in China, the world's largest BEV market, is increasing as BYD Co, Ltd BYDDY and Geely Automobile Holdings Ltd GELYF ramp up new EVs at an attractive price point.
In the U.S., new EV models like the Silverado EV and the continued popularity of the Ioniq 5 EV could also add to competition concerns.
Overall, 2022 EVs were up 65% Y/Y (vs. broader LVP, up ~6% Y/Y).
Price Action: TSLA shares traded lower by 2.71% at $110.56 on the last check Thursday.