Wall Street trims Tesla earnings forecasts after Q4 deliveries disappoint
Xiaolu Chu

Tesla (NASDAQ:TSLA) shares slid over 4% in premarket trading as Q4 deliveries came up short of estimates, leading Wall Street to voice concerns on demand dynamics.
Bernstein analyst Toni Sacconaghi noted that Q4 deliveries of about 405K came up short of the analyst consensus by nearly 15K, falling below that bar despite âaggressive price discountingâ into year-end. Additionally, inventory growth of 34K units to 78K was cited as a concern. Sacconaghi said that Tesla (TSLA) is âfacing a significant demand problemâ into 2023.
âWe expect demand challenges to persist into 2023, particularly since no Tesla models appear to qualify for any IRA rebates except the 7-seat Model Y,â he explained. âWe believe Tesla will either need to reduce its growth targets (and run factories below capacity) or sustain and potentially increase price cuts globally, pressuring margins.â
While Sacconaghi said he was âtornâ on the stock given its stark slide into the close of 2022, he maintained an âUnderperformâ rating on the stock.
JP Morgan likewise took a dim view, advising an Underweight rating on the stock. The bankâs analysts trimmed their price target to $125 from a prior $150 on the back of the Q4 delivery figures.
âAlthough both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition,â the team explained. âMeanwhile, valuation appears to be pricing in upside related to expansion into mass-market segments well beyond our volume forecasts for the Model 3.â
That said, not all analysts were quite so negative. Teams at both Goldman Sachs and Deutsche Bank advised that Tesla (TSLA) is still a Buy despite the disappointing Q4 report.
âBeyond the quarter, we expect challenging headlines around demand softening and associated price cuts to continue; recent reports already suggest Tesla may take an extended shutdown in Shanghai later this month around Chinese New Year,â Deutsche Bankâs analysts acknowledged. âFurther price actions will likely be implemented to align demand with supply, but we continue to believe the company remains best positioned to weather the current macroeconomic conditions, leveraging price to support volume growth, while using various cost levers to protect margins.â
Goldman largely agreed on these points, noting that the âincremental negativeâ of the Q4 delivery report does not dampen their long-term perspective on the stock. While EPS estimates were trimmed due to expected margin compression amid price cuts, Tesla (TSLA) remains âwell positioned for long-term growth,â according to equity analyst Mark Delaney.
Read more on SA contributors that forecast Teslaâs 2022 tumble.