Analysts React To Tesla's Delivery Miss, Tax Credits

Tesla, Inc. TSLA investors missed out on the market bounce off of morning lows Wednesday after the company’s Q4 deliveries number fell short of analyst expectations.

Analysts stepped in to defend Tesla’s long-term outlook, but it seems as though the problems that plagued the company in 2018 aren’t quite in the rear-view mirror just yet.

Disappearing Tax Credits

Tesla announced it delivered 90,700 vehicles in Q4, about 2,000 short of consensus analyst expectations. The company also announced it's cutting prices on all of its vehicle models by $2,000 to offset a drop in electric vehicle tax credits that started Jan. 1. Federal tax cuts for EV buyers will drop from $7,500 to just $3,750 this year, and Tesla investors weren't thrilled that the company will be eating more than half of that $3,750 drop.

Wedbush Securities analyst Daniel Ives said Tesla bulls were also likely disappointed tax credit-related demand didn’t drive stronger Q4 Model 3 deliveries higher.

“In sum, this was a strong quarter for Tesla but Model 3 deliveries missed Street expectations and this will be a cloud over the name until the company reports earnings in late January and gives initial guidance for European Model 3 demand in 2019 which continues to be key,” Ives said in a midday note.

Psychological Speedbump

Loup Ventures' Gene Munster said Tesla’s long-term bullish story remains on track ahead of a $920 million note due in March.

“These developments are psychological setbacks for investors looking to gain confidence in Tesla production and underlying demand, but the news does not fundamentally change the company’s long-term opportunity related to EV, renewable energy, autonomy, and ridesharing,” Munster wrote in a blog post.

Target Cut

Wedbush reiterated its Outperform rating and $440 price target for Tesla, but others were not so quick to dismiss the Q4 numbers. RBC Capital lowered its price target for Tesla by about 14.7 percent from $340 to $290.

Tesla stock dropped 6.5 percent in Wednesday’s session and is down 11.4 percent overall in the past month.

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