Tesla Stock: Here's Goldman's 'Most Important Takeaway' From Musk's Earnings Call

(Yahoo!Finance) - Goldman Sachs sees one heck of an electrified move in Tesla stock (TSLA) over the next twelve months.

Analyst Mark Delaney, who maintained a Buy rating and $200 price target on the stock, reiterated his case in a note following Tesla's earnings on Wednesday. The price target assumes about a 25% upside from the stock's current levels.

"Given the focus of investors on Tesla’s delivery volumes in particular (and the importance of volume for its vertically integrated model and the cost benefits long-term of its newer factories when at scale)," Delaney wrote, "we see the order strength as the most important takeaway from the call."

The bullish note on Tesla comes after the company reported a mixed fourth-quarter and full-year outlook.

Tesla's fourth-quarter gross profit margin came in at 23.8%, short of estimates of 25.4%. The automotive gross profit margin clocked in at 25.9%, compared to analyst estimates of 28.4%.

During the earnings call with investors, Tesla CEO Elon Musk did his best to sound enthusiastic about Tesla's business.

He also addressed demand concerns, stating: "Thus far in January we have seen the strongest orders year to date ever in our history." However, he also warned of a "severe" recession this year.

The economic warning appears to have been baked into Tesla's 2023 volume growth guidance of 38%, which fell below a longer-term target of 50%.

Musk also announced that Cybertruck production would be delayed until the summer, with "volume production" commencing in 2024.

Despite the uncertainties, Tesla stock surged nearly 11% on Thursday as investors favored Musk's commentary on near-term demand trends.

"We continue to believe that the company is well positioned for long-term growth given its leadership position, both in terms of cost structure and as a full solution provider in clean mobility," Delaney said.

Squishier aspects from the earnings call, however, did lead others on Wall Street to take a more measured view of the stock.

For instance, Guggenheim analyst Ronald Jewsikow maintained a Sell rating on Tesla shares.

"We are a bit surprised to see shares rallying after-market with sizable negative revisions likely to FY23/24 EPS and gross margins," Jewsikow wrote in a client note. "We continue to believe taking price back on the 3/Y will be challenging and protracted and that investors need to recalibrate valuation for a reset growth algorithm over the next several years as a result."

By Brian Sozzi · Anchor, Editor-at-Large


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