Tesla is up 57% in 2023; Could a Q1 delivery hit take it higher?

Investors in Tesla stock are on needles and needles to see which electric vehicle giant emerges when first-quarter shipment figures are released in the coming days. will it be Tesla (TSLA), which fell sharply short of its fourth-quarter earnings and disappointed Wall Street a few months ago, or the automaker that met analysts’ sky-high expectations?


On Jan. 3, a day after missing fourth-quarter delivery estimates, Tesla stock fell more than 12%. That day remains the worst for Tesla stock in 2023. But shares have rallied over the year, gaining around 57%.

Tesla is preparing to release first-quarter 2023 delivery and production data in early April, with Wall Street expecting around 432,000 Tesla deliveries, according to FactSet. Based on previous releases, Tesla tends to report first-quarter delivery numbers on April 2nd.

If analysts’ predictions hold true, Tesla’s first-quarter numbers would represent a 39% increase compared to the 310,000 deliveries for the same period in 2022. Analysts forecast Tesla deliveries in 2023 at around 1.8 million.

What the fourth quarter numbers were

Tesla deliveries hit a record 405,278 in the fourth quarter of 2022, up 31% year over year and nearly 18% from the 343,830 in the third quarter. Deliveries rose 40% to 1,313,851 in 2022, but well below the company’s target of a 50% increase. Analysts had expected Tesla deliveries of around 420,000 in the fourth quarter.

Wedbush analyst Daniel Ives, a longtime Tesla bull, wrote Wednesday that Wall Street is watching closely as “demand for (Chief Executive Elon) Musk & Co. holds in this shaky macro.”

Ives told investors Tesla should hit “at least” around 420,000 deliveries in the first quarter, with “possible upside depending on logistics around deliveries this week.”

Ives expects Tesla to deliver 402,000 Model Y and Model 3 vehicles with 18,000 Model S and Model X deliveries. The mix will “likely be skewed upwards as Model Y prices are cut in China and the US,” Ives wrote.

“The macro remains uncertain and we wouldn’t be surprised if Tesla sees more marginal price cuts in both the US and China in the coming months to further fuel consumer demand,” he warned.

Tesla stock analyst concerns

But on Tuesday Deutsche Bank (DB) cut Tesla’s first-quarter delivery estimates to 416,000, reflecting uncertainty about demand after the EV giant cut prices earlier this year. This sparked a price-cutting war in China and the US

This comes after Barclays analyst Dan Levy wrote on Monday that he expects a “modest” delivery hit.

“Concerns have been building over the pace of deliveries given the weakening demand signals. However, we believe that comments on the pace of production are likely to imply some upside, which we anticipate will be ~430k units in the quarter,” Levy wrote.

Levy said if Tesla’s deliveries come in better than expected, it “could be a catalyst for the stock as expectations have fallen amid signs of softening demand.”

Tesla shares rose 0.72% during market trade on Thursday to 195.28. On Wednesday, TSLA shares rose 2.5% to 193.88 on below-average volume.

Tesla price cuts and China

Meanwhile, in China, the world’s largest electric vehicle market, Tesla is on course for record monthly deliveries in March. Tesla sold 140,453 Chinese-made vehicles in the first two months of the year. The global EV giant exported 57% of those vehicles to Europe and elsewhere.

China EV sales will continue to recover in March; BYD Q1 sales up 80%

Top Tesla competitor on Tuesday BYD (BYDDF) reported skyrocketing fourth-quarter and full-year earnings. This comes amid a Tesla-initiated electric vehicle price war in China, which led to BYD slashing prices on models to compete with Tesla.

Tesla cut prices in China on January 6 after major cuts in late October 2022. The global EV giant also significantly reduced prices in the US and Europe on Jan. 13. In the US, Tesla is also benefiting from new tax credits. The company cut European prices again in early March, with further US discounts for the Model S and X.

However, Tesla’s lowest-priced vehicle, the Model 3, could lose eligibility for the new $7,500 EV tax credit in late March. Last week, Electrek reported that Tesla told employees it expects to lose credit because the battery is made in China.

Analysts say the average selling price for Tesla vehicles in the first quarter was around $47,410, according to FactSet. That’s down from $51,400 in the fourth quarter and $52,100 a year ago.

TSLA stock

Since March 13, Tesla stock is up around 12%, despite SVB Financial, Signature Bank of New York, and unlucky investors CreditSuisse (CS) raised concerns about broader financial instability. By market open on Wednesday, Tesla stock had fallen about 5% for the entire month of March.

Before the bank collapses, Tesla sold off sharply from March 6-10, falling 12.3%. However, Tesla stock found support at its 50-day and 10-week moving averages.

Tesla stock is still forging a bottom below the 200-day moving average. But that key level is now below the potential buy point of 217.75.

Tesla shares rank third in IBDs Industry group of automobile manufacturers. TSLA has a composite rating of 89 out of 99. Tesla shares also have a relative strength rating of 82. The EPS rating is 99.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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Source : www.investors.com

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