Tesla Analyst Says Buy The Dip Ahead Of Q1 Deliveries: 1 Reason He Expects Number To Beat Street View

Tesla Inc. TSLA shares retreated on Wednesday along with the broader market and an analyst flagged it as a buying opportunity.

What Happened: The Tesla dip that many investors wanted ahead of the first-quarter deliveries report has materialized, said Future Fund co-founder Gary Black. He noted that Treasury yields were plunging, which is good for equities.

“Hope folks who were waiting for the dip are buying,” Black said.

See Also: Best Electric Vehicle Stocks

Black expects Tesla’s first-quarter sales to beat the consensus estimate of 420,000 units, with China and the U.S. volume likely coming in at a record and Europe potentially finishing strong.

The Tesla management said at the company’s March Investor Day that volume has responded to the price cuts, the analyst noted. The management would lose huge credibility if the first-quarter volume misses even after the 6-20% price cuts, Black said.

“I highly doubt $TSLA mgmt would be so adamant on both the 4Q conf call and Investor Day that demand has been strong if 1Q volumes weren’t good,” the fund manager said.

Black models first-quarter deliveries to be at least 5% higher than the fourth quarter’s tally of 405,000, translating to at least 425,000 units. Else “management loses a ton of credibility,” he added.

Why It’s Important: Tesla‘s full-year 2022 deliveries came in soft amid the supply and demand challenges. Since then, the company has initiated some aggressive pricing actions across the globe.

Incidentally, in China, the downward price adjustments began in late October. Weekly China insurance registration data for Tesla released on Tuesday showed an increase to 18,712 units in the week ended March 17, up from 17,032 units in the previous week. Insurance registrations have been tracking an increasing trajectory for about four weeks now.

Price Action: Tesla ended Wednesday’s session down 3.25%, at $191.15, according to Benzinga Pro data.

Check out more of Benzinga's Future Of Mobility coverage by following this link.

Read Next: Tesla's Credit Rating Just Got Upgraded From Junk To Investment-Grade Status At Moody's: What That Means For The EV Maker