In the wake of Tesla (NASDAQ:TSLA)’s earnings report after the close on Tuesday, which fell short of analyst expectations, Wall Street is witnessing a downward revision in stock targets for the electric vehicle giant. The post-earnings period has prompted a reevaluation of Tesla’s performance and outlook, leading to a shift in sentiment among investors and analysts alike.
Tesla earnings breakdown
Tesla (NASDAQ: TSLA) reported first-quarter EPS of $0.45, $0.04 worse than the analyst estimate of $0.49. Revenue for the quarter was $21.3 billion versus the consensus estimate of $22.27 billion.
Despite the earnings and revenue miss, Tesla shares are up more than 11% premarket Wednesday, trading above the $161 per share mark.
The EV maker’s announcement that it was speeding up the launch of a new model overshadowed its results, boosting the stock price in the process.
Despite investor concerns and reports that the EV maker could scrap plans for a cheaper EV, Tesla touted the launch of new models.
“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” the company said.
Analysts cut Tesla stock targets
Reacting to the earnings release, analysts at UBS cut their price target for Tesla to $147 from $160 per share, maintaining a Neutral rating on the stock. The investment bank said “1Q24 auto GM ex-credits at 16.4% was much better than expected, aided by lower raw materials and Full Self-Driving (FSD) recognition.”
“Further, TSLA took the ultimate bear case off the table as there is a new, lower-cost product
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Coming,” added UBS. “However, increasingly, TSLA is a play on autonomy, and while progress is being made, we are cautious on near-term viability. In our view, this conversation will get somewhat tabled until 8/8 robo-taxi day.”
Meanwhile, analysts at Canaccord cut their Tesla price target to $220 from $234, but the firm held its Buy rating on the stock.
“New, fuller information from management helped to at least partially solidify both the near-term and longer-term earnings trajectories of the firm — that had been so muddied over the last few weeks,” said Canaccord.
They noted that demand has been weaker in the near term, but management still expects to grow units in 2024. In addition, for the long term, the firm said that there has been a change to the next-gen vehicle rollout. Importantly, they learned that the cancellation of a next-gen, low-cost, non-Robotaxi vehicle “was merely a half-truth.”
Truist cut its Tesla price target to $162 from $176, keeping a Hold rating on the stock.
“TSLA’s Q1 result was modestly below consensus, but messaging around new auto products and improving AI developments were distinctly positive surprises, likely smoothing performance between the prior growth wave (3/Y ramp) and the next growth wave (next-gen vehicle ramp),” said Truist.
“Offsetting this, we highlight elevated risks: a big recent price cut, significant recent management dislocations, and the overhang from CEO Musk’s compensation package dispute, which collectively make it difficult for us to turn more optimistic.”
