(Updated - April 29, 2024 4:41 AM EDT)
Phillip Securities analysts reduced Tesla's (NASDAQ:TSLA) stock to Neutral following the carmaker’s latest earnings report.
As many expected, Tesla's results for fiscal Q1 2024 fell short of expectations, primarily due to decreased vehicle deliveries and ongoing pricing pressures.
The company's revenue and adjusted profit after tax missed annual forecasts, achieving only 19% and 15% of the projected figures for the full year, respectively. In addition, it was the fifth consecutive quarter of declining average selling prices (ASPs) for the company.
The electric vehicle (EV) segment saw a 13% year-over-year drop in sales, driven by a 9% decrease in volume and a 5% reduction in prices.
“EV industry growth under pressure from prioritisation of Hybrids, with TSLA losing market share to traditional OEMs. Margins remain under pressure from negative pricing,” analysts wrote.
“We cut our FY24e revenue/EBITDA estimates by 6%/19%, respectively, to reflect lower unit growth and margin headwinds,” they added.
Analysts also reduced the price target on TSLA from $175 to $145, implying more than 13% downside from Friday’s closing price.
“Our WACC assumption of 9% remains unchanged, while we reduce the growth rate to 4% (prev. 5%),” analysts wrote.