Morgan Stanley, Deutsche Bank and other Tesla watchers aren’t concerned about Q4’s big miss

Tesla announced this week that its fourth quarter results were lower than Wall Street had anticipated — but analysts continue to be optimistic about the EV maker’s prospects in 2023.
Tesla reported that it delivered fewer vehicles than expected in its fourth quarter. This has caused some to be concerned about Tesla’s future. However, some investors are still confident in Elon Musk as the year 2023 begins.

Tesla’s latest misstep is not the only concern for investors. Some see Tesla as well-positioned for the coming year.

Tesla reported Monday that it produced 439,701 vehicles, and delivered 405,278 vehicles in the fourth quarter 2022. This was less than Wall Street expected of 431,117 deliveries.

This report added to the news that the company’s stock price fell 69% in 2022 due to rising interest rates, slower demand and Elon Musk’s Twitter Takeover. The shares continued to plummet on the 2023 first day of trading.

While investors may not be thrilled to see Tesla’s numbers fall short of expectations, there are still many who don’t like the fact that Tesla’s vehicle supply has outpaced demand.

Others who closely follow the company aren’t so concerned. Morgan Stanley’s Adam Jonas, a Morgan Stanley analyst, remained positive about Tesla last week. He noted that Tesla “will increase its lead in EV racing, as it leverages the cost and scale advantages it has to further itself from its competition.”

Deutsche Bank analysts wrote Tuesday in a note that Musk’s company came up short of forecasted numbers but “both production and delivery represented all-time records — the firm delivered 1.3million vehicles in 2022.”

Deutsche Bank believes that Tesla’s performance is “solid” despite the challenges of COVID lockdowns and supply chain constraints in China and that Tesla remains in the best position to grow in 2023.

Deutsche Bank stated that they expect “difficult headlines about demand softening” and price cuts to continue. Deutsche Bank stated that the company is best placed to weather current macroeconomic conditions. They leverage price to support volume growth and use cost levers to protect margins.

“Tesla is one of the most well-positioned companies in our coverage to weather consumer conditions,” said the analysts, “considering Tesla’s multiple levers to boost growth and protect margins in 2023.”

Keep the faith

Garrett Nelson, CFRA Research’s senior equity analyst and vice president, reiterated his strong Buy opinion on Tesla shares.

Nelson said in a Tuesday research note that “after a difficult year in EV manufacturer equities like Rivian and Tesla, we are bullish about TSLA 2023.”

Nelson stated that he anticipates a stock buyback and momentum due to the Model 3 and Model Y being available at lower prices and becoming eligible for the federal EV credit of $7,500.

Nelson expects Tesla to set new records in terms of volume as it ramps up production in Austin, Texas and Berlin.

Cautious optimism

In the meantime, Dan Ives, a Wedbush Securities analyst has voiced his concern about Tesla over recent weeks. He stated that the results were indicative of Tesla’s continued growth on Tuesday.

Ives wrote that the numbers show that Tesla is growing quickly on the EV front, despite the fact that automakers are struggling to meet demand and supply. However, Tesla is held to higher standards and a miss or miss is still a miss. The bulls aren’t celebrating these numbers.

Wedbush maintains a Tesla outperform rating.

Ives stated that these numbers could have been worse in Street’s eyes. “The Cinderella ride for Tesla is over, however,” Ives said.

Business Insider has the original article.
—————————————————————————————————————————————
By: astjohn@insider.com (Alexa St. John)
Title: Tesla watchers like Morgan Stanley and Deutsche Bank aren’t sweating its big Q4 miss
Sourced From: www.businessinsider.com/tesla-investors-elon-musks-fourth-quarter-miss-stock-2023-1
Published Date: Tue, 03 Jan 2023 20:00:33 +0000