Analysts revisit Tesla stock price target with Q4 earnings in focus todayheadline

Tesla shares edged higher in early Friday trading as investors looked to claw back some of the losses tied to its disappointing delivery figures while adjusting to price target changes from analysts on Wall Street.

Tesla  (TSLA)  shares, one of the market’s top post-election performers, slumped more than 6% yesterday after the group posted its first-ever annual sales decline even as it recorded record deliveries of just under 496,000 cars over the three months ending in December.

The overall tally, however, missed Wall Street’s more-bullish forecasts and underscored the headwinds facing Tesla’s legacy automaking business, which still generates the bulk of its profits, as EV demand stalls and global competition intensifies. 

The group did published figures on Friday suggesting its China sales rose 8.8% on the year to a record high 657,000 units, although exports to markets in Europe and elsewhere from its Shanghai gigafactory were down 24%. 

Tesla CEO Elon Musk, however, continues to stress that Tesla’s longer-term prospects are more aligned to his ambitions for AI technologies, cybertaxis, energy storage and robotics than legacy carmaking.  

Tesla’s ‘generational’ opportunities

Musk says the group will produce as many as 2 million cybertaxis a year by 2026, while insisting that a “20% to 30% vehicle growth next year” is likely if there isn’t “some force majeure events, like some big war breaks out or interest rates go sky high or something like that.”

Canaccord Genuity analyst George Gianarikas, who raised his price target on Tesla stock by $106 to $404 share after last night’s delivery miss, is also focused on the group’s longer-term.

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“Tesla also has a generational set of growth opportunities ahead, including EVs, autonomy/AI, energy storage, and robotics,” he said. “We acknowledge the limited upside implied by our price target but believe it is appropriate given the near-term volatility.”

Energy storage, in fact, was one of the under-reported aspects of Tesla’s Q4 delivery report. The group said that division, which focuses on residential and commercial markets with its Powerwall and Megapack offerings, saw growth of 244% last quarter with a record deployment of 11.0 gigawatt hours (GHh).

Over the whole of 2024, Tesla’s energy storage deployment more than doubled to 31.5 GWh.

Energy storage a ‘bottom line driver’

CFRA analyst Garrett Nelson, who trimmed his Tesla stock price target by $30, taking it to $530 per share after yesterday’s delivery figures, said energy storage will be a “bottom-line driver for Q4 given the segment’s relatively strong margins”

Tesla will published its fourth quarter earnings after the close of trading on Jan. 29. Wall Street is looking for a bottom line of 72 cents per share on revenues of $27.23 billion. Gross margins, meanwhile, are forecast to rise modestly to 18.85%, according to LSEG data. 

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“We recommend buying the dip, as we expect 2025 to be a year of positive developments related to a federal autonomous driving framework, which we expect to drive multiple expansion, more than offsetting concerns regarding slowing sales growth,” Garrett said.

Deepwater Asset Management analyst Gene Munster, a longtime Tesla bull, thinks investors will be sharply-focused on Tesla’s fourth quarter profit margins as well as its broader outlook for growth and demand.

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“While Elon is focusing investors on autonomy, EV’s still matter given those cars are the foundation of autonomy,” he said. “So besides the usual focus on margins, investors will be listening for updates to Musk delivery expectations for 2025.”

Tesla shares were marked 0.5% higher in early Friday trading to indicate an opening bell price of $381.20 each. 

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