Tesla watchers like Morgan Stanley and Deutsche Bank aren't sweating its big Q4 miss
Even amid lower-than-anticipated vehicle production and delivery numbers to cap off 2022, Tesla still has the faith of some investors for 2023.
Not all investors are worried about Tesla's latest miss piling on top of a slew of bad news — some actually see the EV giant as positioned well for the year ahead. On Monday, Tesla reported producing 439,701 vehicles and delivering 405,278 in the fourth quarter of 2022, short of Wall Street's expectation of 431,117 deliveries for the period.The report piled onto news that the company's market value fell $672 billion to $389 billion and its stock price plummeted 69% in 2022 amid rising interest rates, slowing demand, and CEO Elon Musk's Twitter takeover. Shares continued to fall on 2023's first day of trading.Certainly, a number of investors aren't thrilled to see Tesla's numbers fail to meet expectations, and that vehicle supply outpaced demand yet again. But others who watch the company closely aren't as concerned about all of this. For one, Morgan Stanley's Adam Jonas remained confident in the EV-maker last week, noting Tesla "will widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition."Deutsche Bank analysts wrote in a note on Tuesday that despite Musk's company coming up below forecasted numbers, "both production and deliveries represented all-time records" — the firm delivered 1.3 million vehicles in all of 2022. Because of this, Deutsche Bank says Tesla's results are "solid" in the midst of challenges such as COVID lockdowns in China, supply chain constraints, and macroeconomic issues, and that Tesla remains in the "best position for 2023 growth.""We expect challenging headlines around demand softening and associated price cuts to continue," Deutsche Bank said.
But, "The company remains best positioned to weather the current macroeconomic conditions, leveraging price to support volume growth, while using various cost levers to protect margins. "Tesla is amongst one of the best positioned companies in our coverage to weather weakening consumer conditions," the analysts added, "considering the multiple levers Tesla has in its possession to boost growth while protecting margin in 2023."Keeping the faithGarrett Nelson, VP and senior equity analyst at CFRA Research, reiterated his strong buy opinion on Tesla shares."After a difficult year for EV manufacturer equities such as Tesla, Lucid, and Rivian, we are bullish on TSLA in 2023," Nelson wrote in a research note Tuesday. Nelson said he expects a potential stock buyback and momentum as a result of lower-priced versions of the Model 3 and Model Y becoming eligible for the $7,500 federal EV tax credit. Nelson also expects new record-high volumes for Tesla as it continues to ramp up production in Austin, Texas, and Berlin.Cautious optimism Meanwhile, Wedbush Securities analyst Dan Ives has been vocal with his concerns over Tesla in recent weeks.
On Tuesday, he said the results are indicative Tesla continues to grow. "On one hand in this softer macro with automakers struggling on the demand/supply front these numbers overall paint a picture of a company growing rapidly on the EV front and still in the early innings of a major growth cycle," Ives wrote in a note. "However, Tesla is held to a higher standard and a miss is a miss and the bulls are not popping champagne on these numbers."Regardless, Wedbush is maintaining an outperform rating for Tesla. "These numbers "could have been worse" in the eyes of the Street," Ives said.
"That said, the Cinderella ride is over for Tesla."