Analysts weren’t too impressed with Tesla’s fourth-quarter results this time around. The electric vehicle powerhouse fell short on both earnings and revenue, and their automotive revenue slipped by 8% from the previous year. On the flip side, overall revenue managed a modest 2% increase. Interestingly, net income got a $600 million boost due to an accounting rule change related to their bitcoin holdings. Yet, Tesla’s total net income took a nosedive, dropping 71% compared to the previous year. Despite these hiccups, shares edged up somewhat in premarket trading following the results. Here’s a look at the reactions from major Wall Street analysts.
Starting with Wells Fargo, analyst Colin Langan maintains an “underweight” stance, with a price target of $125 per share, suggesting a potential downside of about 68% from Wednesday’s close. Langan expressed concerns regarding slower delivery growth due to lower demand and reduced return on price cuts. He also highlighted potential risks surrounding new model rollouts, demand, margins, increased US regulation on Autopilot, and the production of promised technologies like Dojo and Optimus.
Over at UBS, despite having a “sell” rating, the firm boosted its price target to $259 per share from $226, indicating a downside of more than 33%. Analyst Joseph Spak questioned the timeline for Tesla’s humanoid robot ambitions and stressed that near-term earnings projections are crucial to stock valuation, not expecting significant contributions to earnings by 2026.
Goldman Sachs opted for a “neutral” rating, with a $345 per share price target, indicating roughly 11% downside. Analyst Mark Delaney pointed out a full stock valuation and potential risks related to Tesla’s short-term targets, such as achieving FSD that surpasses human safety levels and potentially lower delivery growth than the company previously anticipated for 2025.
Evercore ISI maintained an “in-line” rating, with a $275 per share price target, indicating over 29% potential downside. Analyst Chris McNally mentioned that breaking down Tesla’s quarterly results is becoming increasingly challenging because the core EV/Energy Industrial business now constitutes less than 40% of its market capitalization.
Finally, Morgan Stanley’s analyst Adam Jonas remained optimistic, endorsing an “overweight” rating and setting a $430 per share target. Jonas described Tesla’s transition into a diversified entity embracing AI and robotics, indicating an expansion of its total addressable market into areas not fully accounted for in current financial models.
In summary, while Tesla’s quarterly report didn’t dazzle, there remains varied optimism and caution among analysts regarding its long-term potential and near-term challenges in the financial community.
