Tesla (TSLA) is expected to report results on its fiscal fourth quarter on Wednesday, January 29, with a conference call scheduled for 5:30 pm EDT. What to watch for:
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CAUTIOUS ON FUNDAMENTALS: In a research note ahead of quarterly results, Oppenheimer said it anticipates Tesla to continue focusing resources and its narrative on Physical AI technology leadership, while further moderating vehicle sales growth expectations in 2025 under the guise of preparation for Model 2 and autonomous vehicle introduction. The firm expects improvement on mean time between failures and total miles driven, but will be looking for details on system ground truthing and Tesla’s ability to streamline/customize foundation models for autonomy as better indicators of progress. Further, Oppenheimer anticipates CEO Elon Musk will highlight his impact on the U.S. political landscape, but continues to see significant risk to Trump/Musk’s relationship potentially jeopardizing Tesla’s benefit from it. As the firm lowers estimates to reflect moderating U.S. and EU demand, it remains cautious on Tesla’s underlying fundamentals and relative autonomous technology position.
VEHICLE GROWTH OUTLOOK: Cantor Fitzgerald expects Tesla to disclose its vehicle growth outlook for 2025, along with the company’s target for its Energy Generation and Storage business segment, on today’s earnings call, with the firm noting that the call will mark Elon Musk’s first earnings call since President Trump’s Inauguration. Musk may also disclose additional information on Tesla’s Robotaxi segment, and more specifically, its plans to launch via unsupervised full-self diving in Texas and California this year, as well as a more specific timeline for the introduction of Tesla’s lower-priced vehicle, Cantor tells investors in a research note. The firm has a Neutral rating and $365 price target on Tesla shares.
TO FALL SHORT: GLJ Research keeps a Sell rating and $24.86 price target on Tesla ahead of the company’s Q4 results. The firm is modeling EPS of 69c vs. consensus of 77c and Q4 auto gross margin, excluding credits, of 14% vs. consensus 16.3%. GLJ adds that the firm does not expect another model car in 2025 or any full self-driving or Optimus sales this year.
$2 TRILLION VALUE BY YEAR-END: Wedbush raised the firm’s price target on Tesla to $550 from $515, while keeping an Outperform rating on the shares. The firm says it has “growing confidence” in the Tesla’s demand delivery story for 2025 along with a fast tracking of autonomous vehicles under the Trump Administration. After speaking with contacts, Wedbush has growing confidence the Trump administration over the next four years will be a “total game changer” for the autonomous and artificial intelligence story for Tesla over the coming years. It estimates the AI and autonomous opportunity is worth “at least $1 trillion alone” for Tesla and fully expects that under a Trump White House, key initiatives will get fast tracked. Tesla could reach a $2 trillion market cap by the end of 2025 as the company’s autonomous vision starts to take shape along with “very solid” delivery demand, contends Wedbush.
BUY-AND-HOLD IDEA: Piper Sandler raised the firm’s price target on Tesla to $500 from $315 and keeps an Overweight rating on the shares. The firm thinks investors are starting to appreciate Tesla’s potential in “real-world” artificial intelligence. As a result, portfolio managers “are more willing to entertain upside scenarios” for the stock, the firm tells investors in a research note. That said, Piper believes the “long-term narrative often takes a back seat when current-year estimates are falling, and in this regard, the outlook is highly uncertain” for Tesla. Once Tesla fulfills its current launch pipeline, management’s focus will shift away from launching new cars, and toward popularizing full self-driving software, contends the firm. To reflect this, Piper is now modeling a contribution from full self-driving licensing. It values Tesla’s existing businesses at just below $300 per share, inclusive of full self-driving.
Piper says it hasn’t attempted to forecast a contribution from Tesla’s “more ambiguous” artificial intelligence opportunities. It is clear, however, that Tesla’s thesis will ultimately depend on new-age opportunities like Optimus robots and neural-net-training-as-a-service, the analyst adds. The firm says that while Tesla’s first half of 2025 “may be choppy,” the stock remains its top “buy-and-hold idea.”
DELIVERIES: Earlier this month, Tesla reported Q4 deliveries of 495,570 and production of 459,445 vehicles. Following the announcement, Morgan Stanley noted that in order to reach Tesla’s “slight growth” target for FY24, the company needed to deliver at least 514,900 units in Q4, which it missed as the 495,600 units delivered represents about a 3% miss compared to consensus expectations for 510,000 vehicles delivered. The miss reflects a relatively aged product and increased availability of lower priced competition globally ahead of the “hyped” introduction of the cheaper new model Juniper in early/mid-2025, contends the analyst, who also notes positives from the Q4 update, including a material beat in ESS deployment and a six to seven day reduction in days’ supply of inventory. Morgan Stanley has an Overweight rating and $400 price target on Tesla shares.