Investor's Corner
Tesla stock: analysts cut targets, mull demand and growth after Q4 miss
Tesla (NASDAQ: TSLA) analysts are responding to the company’s fourth-quarter delivery miss by cutting price targets and mulling over demand and growth.
Tesla reported its delivery and production figures for 2022 and the fourth quarter yesterday, reporting 405,278 deliveries and 439,701 produced during the year’s final three months. Tesla delivered 1,313,851 cars in 2022, producing 1,369,611.
Tesla (TSLA) Q4 and FY 2022 deliveries reach new highs, but below analyst expectations
Analysts expected closer to 415,000 deliveries in Q4. Although Tesla recorded its biggest year to date and its most successful quarter in company history, they are concerned the company could be facing demand issues despite still holding a majority of the U.S. electric vehicle market and performing well in competitive markets like China and Europe.
JPMorgan analyst Ryan Brinkman lowered his price target on Tesla from $150 to $125 while noting to clients that subsequent delivery misses could be potentially detrimental to the long-term outlook on the stock.
Wedbush’s Dan Ives said Tesla and Musk should outline attainable and realistic delivery targets in 2023. Ives believes 40 percent delivery growth in 2023 would be “respectable,” but the miss in Q4 does not present any super positive connotations as Tesla heads into the new year. “A miss is a miss,” he said.
Goldman Sachs also reduced its Tesla price target from $235 to $205. However, one of its main concerns was whether Tesla could combat potential demand slumps, which it said in its note to investors that it believes the automaker can recover, with indicators pointing to Q2 2023, the firm said.
Morgan Stanley reiterated its $250 price target. “Tesla’s 4Q deliveries, while slightly higher than we had expected, are broadly consistent with our views that EV supply may be recovering faster than EV demand, reflecting a material narrative change in the scarcity of EVs on a global basis,” Adam Jonas said.
Morgan Stanley expected Tesla to deliver 399,000 units in Q4.
2023: Make or Break year for Tesla?
2023 has plenty of catalysts for Tesla, at least according to the company’s own agenda. This year, Tesla plans to launch production of the Cybertruck, announce a new Gigafactory location in North America, and update the Model 3 sedan.
Cybertruck production will be limited at first but is scheduled to hit “mass production” by the end of the year. While significant impacts on Tesla’s delivery numbers will likely not be made by the Cybertruck this year, the rollout of the vehicle will be monumental as it recently reached a two-year delay. Slated to begin deliveries in late 2020, Tesla delayed production as it navigated the COVID-19 pandemic. Production was delayed further while Tesla focused on scaling production of the Model Y at Gigafactory Texas and withstood uncertain economic tides in 2022.
New Gigafactory locations, especially in North America, could prove to be a significant catalyst for the stock as it would indicate demand strengthening for Tesla. Reports have suggested Mexico will end up being the location for Tesla’s next production facility, but the company has not confirmed this.
Disclosure: Joey Klender is a TSLA Shareholder.
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Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
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