Analysts baffled by Tesla not giving an outlook, can't think of another big company not to do so

Published Thu, Jan 25 202410:02 AM EST

Tesla 's lack of guidance is leaving many Wall Street analysts who cover the electric car company puzzled. "While the tone on the call wasn't overly cautious, I still struggle to think of another company who provided such scant level of details on the forward-year outlook," wrote Morgan Stanley's Adam Jonas. "Our team is left with the impression that either (a) visibility is poor, or (b) there are downside risks in the broader EV market outside of Tesla's control." Tesla shares slumped as much as 10.3% to $186.49 in early trading Thursday after posting quarterly results that fell short of Wall Street's estimates , and warning that vehicle volume growth "may be notably lower" than last year. Tesla told investors that it is "currently between two major growth waves." TSLA 1D mountain Tesla shares slump after earnings "Post 4Q23 results, we believe TSLA stock will consolidate near current levels," wrote UBS analyst Joseph Spak. "We see little reason for investors to initiate new, or add to existing, positions." Bracing for a 'cloud path' Tesla's latest financials coupled with what Wall Street perceives as a troublesome outlook pushed many firms to cut their share price targets and turn more cautious on the stock in the near term. Barclays analyst Dan Levy, for example, lowered his target on Tesla shares to $225 from $250, saying that a "cloudy path ahead reinforces some downside risk." The adjustment implies 8% upside from where the stock closed Wednesday. Elsewhere, Wells Fargo's Colin Langan cut the bank's target to $200 from $223 a share, citing limited near-term positive catalysts for Tesla. The new price target suggests shares could fall about 4% from Wednesday's close. "We see higher near-term delivery growth driven by recent price cuts," he wrote. "However, we are cautious on hitting margin targets, and we see the risk of more price cuts later in the year." While Deutsche Bank retained its buy rating on Tesla, analyst Emmanuel Rosner trimmed his price target to $250 from $260, saying that the limited outlook confirmed his guarded view of Tesla's year ahead. "Tesla's very limited outlook commentary last night, in our view confirmed our caution around 2024, in which the company will likely see very limited volume growth and pressure on earnings," he wrote Other firms that were already negative on Tesla saw no reason to shift their view, sometimes citing Tesla's failure to give specific forecasts. Guggenheim left a sell rating and $132 price target in place. "[T]he forward outlook, or lack thereof, cautious macro commentary and details around the next generation platform are likely to pressure shares in the near-term," analyst Ronald Jewsikow wrote. Bernstein's Toni Sacconaghi also stayed one of the Street's most bearish Tesla analysts, retaining an underperform rating and $150 price target following the fourth quarter numbers, which would translate into 28% downside from Wednesday's close. "While 2024 will be a challenging year, it is becoming increasingly apparent that 2025 will likely not be better, with continued pressure on growth and margins," he said. Finding the positive in Tesla's long-term growth Some Wall Street analysts found positives in Tesla's results. "We expect consensus estimates to come down on what will likely be interpreted as a cautious outlook with reduced visibility," wrote Citi's Itay Michaeli. "If there's good news here, it's that: (1) A reset of expectations could finally set Tesla up to beat expectations later in 2024, allowing the 2025 product launch story to come into better view and for the stock to regain momentum." Michaeli lowered Citi's Tesla price target to $224 from $255 a share, implying about 8% upside from Wednesday's close. The bank remains on the sidelines with a neutral rating on Tesla shares, awaiting a "more convincing entry point," he wrote. In a post-earnings note, Goldman Sachs' Mark Delaney reiterated his confidence in the long-term trajectory for Tesla although slower growth will serve as a barrier in the intermediate term. "While we continue to believe that Tesla is well positioned for longer-term growth given its leading position in the EV and clean energy markets, we believe that slower growth over the near to intermediate term both in terms of vehicle deliveries and EPS will be an overhang on the stock," he said. — CNBC's Michael Bloom contributed reporting