Tesla (TSLA) stock fell Monday as Goldman Sachs lowered its 2023 and 2024 profit outlook for the global EV giant. Lower average selling prices are expected to continue weighing on gross margins.
Goldman Sachs analyst Mark Delaney on Monday cut the firm’s 2023 and 2024 EPS estimates for Tesla, telling investors the EV company could cut vehicle prices in 2024 to keep volumes high. Delaney maintained a neutral rating on Tesla stock with a 275 price target, around 3% above where TSLA traded Monday.
Tesla stock fell 3.3% to 265.28 Monday during afternoon market trade.
The Goldman Sachs analyst cut fiscal year 2023 earnings to $3.40 per share, down from $3.50 per share. For fiscal year 2024, Delaney predicts EPS of $4.65, down from his previous $4.75 view. Analyst consensus is that TSLA profit will fall 17% to $3.36 per share in 2023, according to FactSet.
Chief Executive Officer Elon Musk and Tesla have slashed vehicle prices multiple times in 2023, setting off an EV price war. Predictably, the strategy has eaten into profit margins, sending them below the company’s targeted “floor.”
Delaney wrote that his “expectation for near- to intermediate-term margin headwinds” is “offset by our positive view of Tesla’s leadership position in the industry and long-term growth potential.”
Meanwhile, Elon Musk took to X, formerly Twitter, Monday to calling a Wall Street Journal article “utterly false.” The WSJ reported Monday the EV company is in early talks with Saudi Arabia to set up a manufacturing facility. The talks are at a very early stage and could fall apart, according to the Wall Street Journal.
Tesla stock has forged a new base with a proper buy point at 299.29, according to MarketSmith. Monday’s pullback — which found short-term support at the stock’s 10-day moving average — could be constructive following last week’s gain.
After taking nearly a month off from buying or selling Tesla stock, Cathie Wood and her Ark Invest firm decided to offload more of their TSLA stock holdings in consecutive sessions, dumping more than 80,000 shares Wednesday and Thursday.
TSLA stock hit resistance around its 50-day line in late August to early September. On Sept. 11, shares vaulted 10% as Morgan Stanley analyst Adam Jonas hiked his price target by 60% to 400, citing potential huge gains from Tesla’s Dojo supercomputing efforts.
That move pushed Tesla stock above its 50-day line with its Aug. 31 high of 261.18 acting as an early entry for aggressive investors.
Tesla stock has a 98 Composite Rating out of 99. Elon Musk’s Tesla also has an 92 Relative Strength Rating. Tesla stock’s EPS Rating is 93 out of 99.
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