Tesla shares (NASDAQ: TSLA) are trading 0.46% up in the pre-market, adding to yesterdays’ gain of 1.22%. This will be a welcome respite for shareholders who have seen values dip 10.99% over the last month and 27.61% YTD as some of the sentiment surrounding EV giant shifts gear.
As Tesla gears up to report its first-quarter earnings on April 17, the electric car titan helmed by Elon Musk finds itself at the heart of a whirlwind of tech innovation and strategic licensing talks that could redefine the future of the automotive industry. Simultaneously, Wall Street analysts are recalibrating their outlook on the company’s stock amidst fluctuating vehicle delivery numbers and strategic shifts within the company.
Elon Musk, Tesla’s visionary CEO, is on a mission to transform public perception of Tesla. He wants the world to see the company not merely as an automaker but rather as a collective of approximately a dozen tech startups, each pushing the boundaries of innovation in their domains. Tesla’s current focus encompasses a range of futuristic endeavours including next-generation electric vehicles, sophisticated energy storage solutions, the Full Self-Driving (FSD) suite, and a slew of other avant-garde projects. It is this mosaic of initiatives that positions Tesla as more than just a car manufacturer, but as a disruptive conglomerate in the tech space.
Perhaps among the most disruptive and anticipated of Tesla’s technologies is the Full Self-Driving system. Musk has doubled down on this technology, making it mandatory for all new Tesla vehicles sold in North America to be installed with and have the FSD software activated. This move underscores Musk’s confidence in the system’s readiness and the role it plays in Tesla’s expansive vision.
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In a strategic pivot that could potentially ripple through the automotive industry, Tesla is considering licensing its venerated FSD software and hardware suites to other car manufacturers. Such a move would not only diversify Tesla’s revenue streams but could also establish the company as a standard-bearer for autonomous vehicle technology in the broader market.
However, amidst these ambitious strides, Tesla has not been immune to headwinds. Despite smashing vehicle delivery records, the company reported weaker-than-anticipated fourth-quarter earnings, an outcome that has led to some scepticism among investors and analysts alike. Wall Street has responded, with several analysts revisiting and lowering their price targets for Tesla’s stock in the light of tempered delivery estimates and less than stellar March performance data.
Tesla Price Target & Analyst Updates
Notably, industry watchers such as Citi and Bernstein have shared their less optimistic delivery estimates and reduced their price targets for Tesla. In a similar vein, Oppenheimer has revised its initial delivery estimates for the first quarter, now forecasting around 468,000 vehicles. Bernstein also revise down their TSLA price target to $120 from the previous mark of $150.
RBC lowers delivery estimate to 446,000 (from 500,000), Morgan Stanley cut to 425400 (from 469400) but both keep price targets unmoved.
One other big name to adjust their price target in recent days was Citi, where analyst Michaeli lowered the target to $196 from $224 but keeps a Neutral rating in tact. Their own Q1 delivery estimate goes to 429,9000 from 473,300. In a research note it was remarked that Q1 “looks tough on aggressive consensus estimates”.
Elsewhere it has been noted Tesla may be on the cusp of a major licensing deal with CATL, a leading Chinese electric-vehicle battery manufacturer. Should CATL and Tesla strike a deal to license the latter’s battery technology in the U.S., it could mark a pivotal moment in the electric vehicle market, one that Morgan Stanley hints could be a game changer for the industry.
With an average price target of $207, with $320 being the high mark and a lowball $23.53 pulling things the other way, there is no doubt that this is a stock that polarises opinion in some respects.
The multitude of developments around Tesla—ranging from its technology-centric growth strategy to tentative licensing opportunities and re-evaluation by Wall Street—paints a picture of a company at an inflection point.
