Tue. Sep 19th, 2023
    Tesla Continues with Price Reductions in the Electric Vehicle Sector

    According to analysts at Goldman Sachs, Tesla continues its series of price reductions in the electric vehicle (EV) sector, which is expected to affect the company’s profit margins. The price cuts are primarily focused on Tesla’s Model S and Model X vehicles, and while they are projected to impact the company’s financial performance this year, they may be partially offset by an increase in Model 3 prices.

    Goldman Sachs analyst Mark Delaney foresees further price reductions in 2024 as a way to boost sales volume. These reductions are expected to counterbalance the advantage gained from cost reductions in terms of earnings per share (EPS). As a result, Goldman Sachs has revised its EPS forecasts for Tesla, lowering the EPS projections for this year from $3.00 to $2.90, and decreasing the forecast for 2024 from $4.25 to $4.15.

    These forecast revisions align with the overall market expectations. According to FactSet, consensus analyst estimates project an EPS of $2.89 for this year and $4.50 for 2024.

    Despite the adjustments in financial projections, Delaney maintains his forecast that Tesla will deliver around 2.3 million vehicles in 2024, representing an increase compared to the expected deliveries of 1.8 million for this year. This estimation is consistent with Wall Street predictions.

    Regarding Tesla’s stock performance, Delaney has a Neutral rating with a 12-month price target of $275. On Monday, Tesla’s shares fell 2.5% to $267.51, despite a significant increase in its value throughout this year.

    In conclusion, Tesla’s strategy of implementing price reductions is expected to continue, potentially affecting the company’s profit margins. However, the projected increase in sales volumes and future delivery forecasts remain positive. It will be interesting to see how these factors impact Tesla’s overall financial performance in the coming years.

    – Electric Vehicle (EV): A car powered by one or more electric motors, using electrical energy stored in rechargeable batteries or another energy storage device.

    – Reuters
    – Goldman Sachs
    – FactSet


    Leave a Reply

    Your email address will not be published. Required fields are marked *