Deutsche Bank analysts expect Tesla's (NASDAQ:TSLA) first-quarter deliveries and earnings to miss current Street expectations by a wide margin, the bank said in a note Monday.
Still, Tesla stock rose 2.8% on the day.
Furthermore, they continue to see material downside risk to the full-year 2024 consensus due to limited volume growth and pressure on profitability from price cuts. Deutsche Bank has a Buy rating and a $218 price target on Tesla.
"For Q1, we lower our deliveries estimate to 427k units, down from 476k units prior due to low Model 3 production in the U.S. since Highland refresh, particularly slow Cybertruck ramp up, and overall pressure globally from weak EV demand," said Deutsche Bank. Analysts also cut their full-year deliveries estimate to 1.96 million units, below the consensus of 2.1 million.
The bank sees pressure on Tesla's margins and earnings, as the company already announced deep price cuts in both China and Europe earlier in the quarter and made further moderate price adjustments in February to incentivize vehicle purchases.
"The slower ramp up in Model 3 in the U.S. and earlier factory shut down as well as the recent arson attack at the Berlin facility will impact factory efficiency gains, and with the new labor costs and margin dilutive Cybertruck coming online at the start of 2024, we expect Q1 margin to slide deeper on a q/q basis, with limited room for improvement throughout the year," stated Deutsche Bank.
Due to the continued downside to volume and pricing expectations, Deutsche Bank continues to see considerable risk to earnings expectations in 2024.