For Tesla, this is the most important delivery result of all time. Just look at the stock.

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Tesla

Investors are used to wild trading. Still, 2023 was wilder than usual, making the EV leader’s upcoming first-quarter delivery figures more relevant than ever.

With trading beginning on Wednesday, with a few trading days left in the quarter,

Tesla

Stocks (ticker: TSLA) are up about 54% in 2023. It’s the best start to a year for Tesla stock ever. Second place goes to 2014, when shares were up more than 41% from the start of the year through the end of March.

Tesla shares were up 1.3% to $191.65 in the last trade. The

S&P500
And Nasdaq Composite increased by 0.9% and 0.6% respectively.

If you had asked investors what was likely to happen on January 3rd, they probably would not have predicted this outcome. Tesla shares had their worst trading day on the first day of a year in 2023, falling 12.2% after fourth-quarter deliveries missed expectations.

Tesla had delivered around 405,000 vehicles. Wall Street was looking for about 420,000 units.

The Jan. 3 disappointment came after Tesla stock had its worst year ever in 2022, falling 65%. Second place was in 2016, when shares fell about 11%.

The turbulent start to 2023 makes the upcoming delivery result very important for investors. Tesla typically reports quarterly shipments on the second day of each quarter. This time it would be Sunday April 2nd. Wall Street is expecting about 420,000 units, which would be a record for the company, up about 4% from the fourth quarter and up about 35% year over year.

“All street eyes [are] how demand for Musk & Co. holds up in this shaky macro,” Wedbush analyst Dan Ives wrote in a Wednesday report. “Since the introduction of the Model Y/3 price cuts earlier this year, demand has clearly been resilient throughout Q1.”

Tesla cut prices around the world in January, which the company says has led to increased ordering activity. Ives believes Tesla can deliver around 430,000 units, which is ahead of the current consensus.

He’s a Tesla bull with a Buy rating on stocks. Its target price is $220 per share. Gordon Johnson, an analyst at GLJ Research, is a longtime Tesla bear. He rates the stock a Sell and has a price target of $24.33 on the stock.

Johnson also sees Tesla beating the consensus figure of 420,000 and making 425,000 deliveries. Still, he’s concerned that price cuts are a sign of eroding demand and that lower prices will result in lower-than-expected profits in 2023 and beyond.

Tesla shares typically trade well after a bounce, with shares outperforming the market about 70% of the time in the period just after delivery results to just before quarterly earnings are reported.

However, that is not what happened in 2023. The company missed delivery expectations, and the stock rose about 34% between Jan. 3 and just before the Jan. 25 earnings release. The S&P 500 gained about 4% over the same period.

Imagine that. That makes it difficult to gauge stock reaction to first-quarter results. A figure of around 425,000 should be enough to keep things stable – at least for a few days.

Fairlead Strategies founder Katie Stockton believes Tesla shares must hold $185 after the delivery results or they could fall as low as $160. Stockton looks at chart patterns to get a feel for how a stock may respond to fundamental data points. If things go well, Tesla stock could trade at around $215 in the near term, she adds.

Write to Al Root at allen.root@dowjones.com