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Tesla analyst: bulls can take advantage of TSLA dip before Q1 delivery results

Image used with permission for Teslarati. (Credit: Tom Cross)

Tesla shares (NASDAQ:TSLA) have shown some volatility during the past weeks, but a Wall Street veteran has noted that the electric vehicle maker’s bulls now have a buying opportunity. This was especially the case as the electric vehicle maker will soon be releasing its Q1 2023 delivery and production report. 

As per The Future Fund, LLC co-founder Gary Black, the dip in TSLA stock that numerous investors were looking forward to has already materialized. Black also stated that Treasury yields were dropping, which should be advantageous for equities. 

“We’re getting a Tesla dip that many wanted before 1Q deliveries report 4/2. The 2-yr and 10-yr Treasuries are both plunging (-20bp and -14bp, respectively) which is good for growth equities. Hope folks who were waiting for the dip are buying,” Black wrote on Twitter. 

Tesla’s Q1 sales are anticipated to surpass the consensus estimate of 420,000 units for the first quarter, Black noted. Following Tesla’s aggressive price cuts in January, the US and China are both expected to set new records for sales. Europe is also expected to finish strong for Tesla, especially amidst the ongoing Model Y production ramp of Gigafactory Berlin. 

During Tesla’s Investor Day, the company’s management hinted that volume has increased in response to the company’s price reductions, the analyst stated. Black added that the management’s credibility would be significantly damaged if first-quarter volume fails to meet expectations.

“I highly doubt Tesla management would be so adamant on both the 4Q conference call and Investor Day that demand has been strong if 1Q volumes weren’t good. TSLA 4Q volumes were 405K, so I expect 1Q to be at least 5% above that (425K vs. 420K consensus), or management loses a ton of credibility,” Black wrote on Twitter. 

The results of Tesla’s aggressive pricing strategy have been quite notable. As per weekly China insurance registration data, Tesla’s registered units for the domestic market increased from 17,032 units to 18,712 units in the week ending March 17. Tesla’s insurance registrations have been on an upward trend for the last four weeks as well. 

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Tesla analyst: bulls can take advantage of TSLA dip before Q1 delivery results
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