By Michael Elkins
Bernstein reiterated an Underperform rating on Tesla (NASDAQ:TSLA) with a $150.00 price target after speaking with the company and several investors. Tesla has rallied dramatically despite reporting mixed results on Jan 25. Tesla missed margins significantly but provided reassuring guidance and commentary on demand and beat on EPS due to a lower-than-expected tax rate and FSD revenue recognition.
The bulls Bernstein spoke with believe that the longstanding Tesla bull thesis is intact, while the bears believe that the electric car maker’s near-term numbers are too high and that 2024 may not be any better. While some bears concede Tesla appears to have a current cost/margin advantage vs. peers, they argue that advantage will get competed away as others scale production.
Bernstein analysts wrote in a note “The past week has been a reminder of how difficult Tesla's stock is to call in the near term. On one hand, Tesla appears to have created demand elasticity, sentiment seems to be improving and the company's forthcoming analyst day on March 1 could be a further positive catalyst. That said, we believe consensus numbers have not been reset sufficiently and there is still further downside from Tesla's demand struggles. We also worry that the setup could be even more challenging in '24, when Tesla will target selling 2.5M-3M cars with largely its same lineup.”
Shares of TSLA are down 0.59% in premarket trading on Monday.