Tesla to Deliver Another Strong Quarter, Likely to Beat Estimates

The California-based electric vehicle and clean energy company Tesla is expected to report its fourth-quarter earnings of $2.31 per share, which represents year-over-year growth of 180% from $0.80 per share seen in the same period a year ago.

The high-performance electric vehicle manufacturer would post revenue growth of over 50% to $16.65 billion. The electric vehicle producer has beaten earnings estimates only twice in the last four quarters.

“Tesla 4Q deliveries were 20% above our forecast, annualizing to over 1.2mm units, which is already above our prior FY22 forecast. We raise our forecasts and target to $1,300 on this ‘opening act’ and look for more in FY22,” noted Adam Jonas, equity analyst at Morgan Stanley.

Tesla stock closed 5.37% lower at $942.80 on Friday. The stock slumped over 10% so far this year after surging nearly 50% in 2021.

Analyst Comments

“Q4 results on 26 Jan are critical to validate (or not) the Q3 profit dynamics that could see Tesla 1) carve out meaningful share from legacy OEMs busy protecting their own share by ramping up BEVs and 2) claim a disproportionate share of the industry profit pool. We raise 2021-23 EBIT and FCF 10%, mostly on higher volume,” noted Philippe Houchois, equity analyst at Jefferies.

Tesla Stock Price Forecast

Twenty-nine analysts who offered stock ratings for Tesla in the last three months forecast the average price in 12 months of $1,074.69 with a high forecast of $1,580.00 and a low forecast of $295.00.

The average price target represents a 13.86% change from the last price of $943.90. From those 29 analysts, 15 rated “Buy”, eight rated “Hold” while six rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $1300 with a high of $1600 under a bull scenario and $500 under the worst-case scenario. The investment bank gave an “Overweight” rating on the electric vehicle producer’s stock.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base and overtime generate a higher % of revenue from recurring/high-margin software & services. Services drive the upside. We forecast Tesla’s services EBITDA to account for 18% of total EBITDA by 2030 & 37% by 2040. Includes: FSD, infotainment, upgrades, charging, maintenance, telematics, etc,” Morgan Stanley’s Jonas added.

“Valuation supportive vs. tech. Including Services, Energy & Insurance in our forecast, at $1,300, Tesla trades at 15x 2030 EBITDA and 3x 2030 sales. Expensive vs. auto but not vs. software/tech. Growth: We forecast Tesla to sell 8.6mm units by 2030 and grow total revenue at a 31% 10yr CAGR.”

Several other analysts have also updated their stock outlook. Credit Suisse raised the target price to $1025 from $830. RBC lifted the target price to $1045 from $1005. BofA Global Research upped the price objective to $1300 from $1200.

Technical analysis also suggests it is good to buy as 150-day Moving Average and 100-200-day MACD Oscillator shows a buying opportunity.

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