Tesla Bull Adam Jonas Says Q4 Earnings Call Provided Nothing To Disrupt 'Prevailing Sentiment Of Bearishness' — Retains Price Target Of $345

Morgan Stanley analyst Adam Jonas remains overweight on EV giant Tesla Inc TSLA with a $345 price target despite warnings of a lower volume growth rate in 2024.

Tesla Thesis: Jonas said in a note that Tesla’s result and subsequent conference call did not provide any new information to change existing sentiments. In fact, the stock may continue to test lower near-term trading levels if Tesla cannot restore confidence in its growth outlook, the analyst said.

The analyst opined that the company offered little details on its forward-year outlook. While the company said that its volumes will be ‘notably lower’ in 2024 as compared to the last year, it did not specify a percentage. Jonas expects delivery growth to fall to 15% in 2024, less than half of the 38% growth it achieved in 2023.

However, the analyst continues to not bet against the company’s share price owing to the potential for an AI wildcard through the year and the capex guidance of at least $10 billion in FY24, higher than Morgan Stanley’s estimate of around $8.5 billion.

During the earnings call, company CEO Elon Musk suggested the possibility of an update on AI later this year.

Change In Estimates: While retaining their price target, Jonas decreased their Tesla revenue estimates for FY24 to $106 billion on the back of lower expected auto revenue. However, the analyst now forecasts slightly higher automotive gross profit in the coming year of $13.3 billion and slightly higher operating margin with FY24 at 5.9% and FY25 at 8.3%.

Price Action: Tesla shares closed down 0.6% at $207.83 on Wednesday and fell about 6% after hours, according to data from Benzinga Pro.

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