Tesla (NASDAQ: TSLA) revealed its first quarter production and delivery figures, which were lower than anticipated. Bernstein analysts still think the stock might go much lower, even though shares are down almost 60% from their last high.
This year, the company predicts, Tesla will witness a decline in profits due to poor vehicle deliveries. The company is now trading at around $170 per share, but Bernstein has maintained its underperform rating and price target of $120 (or 29% below the current price) for March 26.
Reasons why Tesla's stock price could fall to new lows Deliveries of 386,810 vehicles in the first quarter were much lower than the 443,000 predicted by analysts. Even though Tesla officials have warned investors about a difficult year ahead, Wall Street has reacted negatively to the company's report
Most people who buy cars pay for them with monthly payments, so CEO Elon Musk has been scaring investors about how increasing interest rates will affect sales of vehicles since last year.
Changing to a new generation of manufacturing platform is another thing that can hurt the business this year. During the company's fourth-quarter earnings call in January, Tesla CFO Vaibhav Taneja said that the team's focus on this transition will hinder volume growth in 2024.
Does one should buy, sell, or retain Tesla stock? With a larger cash balance than debt and a profit margin greater than many other automakers, Tesla is well-positioned to weather any storm that may come its way in 2023.
The stock is acting in a typical predictable fashion; it often lowers on poor deliveries and rockets higher at times of increasing demand. That trend can be used by investors with a longer time horizon to their benefit.
This year, Bernstein's analyst forecasts, shares may hit new lows, and until interest rates settle down, Tesla is unlikely to see surging electric vehicle sales again. Investors willing to wait for the company's growth ambitions to materialize may find value in purchasing the shares.
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