Proactive Investors - Tesla Inc (NASDAQ:TSLA)'s fourth quarter earnings report due Wednesday will see investors’ eyes on the company’s margins and its 2024 unit guidance, analysts at Wedbush believe.
In a note to clients, the analysts wrote that the electric vehicle (EV)-maker will importantly be giving investors their first glimpse of its 2024 guidance outlook.
“After a very strong 2023 in which price cuts from Tesla were the right poker move that enabled healthy demand in China and globally now [CEO Elon] Musk and Tesla face a key strategic decision ahead: Keep cutting prices with a glut of EVs and competition flooding the industry or hold serve and maintain price and margin stability for 2024 through this softer EV demand storm,” they wrote.
“Which pricing path Tesla takes will be a foundational move for the future of Tesla over the coming years in our view.”
Investors will also be looking out for Tesla’s view of global customer demand for its Models Y and 3 and early production and demand signs for its Cybertruck, the analysts wrote. Wall Street analysts will expect 2.1 to 2.2 million units about 20% unit growth in 2024.
“We still anticipate Tesla to maintain its long-term 50% unit growth which is more procedural at this point rather than true guidance for the coming year,” the Wedbush analysts wrote.
The analysts noted that Tesla’s 3Q earnings call left investors and bulls with many questions and few answers, which has been an overhang on the stock since late October.
“The line in the sand around margins must be drawn tomorrow to give investors the hittable bogeys and targets for 2024 and then start the next phase of the Tesla growth story through this near-term period of supply glut and uncertainty for EVs,” they wrote.
They maintained their ‘Outperform’ rating on the company and $350 price target.
Tesla shares traded hands at US$212 in early trade on Tuesday.
The company will report its 4Q results on Wednesday, January 24, after the stock market closes with analysts on average expecting the company to report earnings per share of $0.74 on revenue of $25.9 billion.