Tesla hit with downgrade lower sales growth warning: 4 big analyst cuts

Investing.com — Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Tesla, Boeing, Hertz Global, and VF.

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Tesla downgraded following disappointing Q4

KGI Securities downgraded Tesla (NASDAQ:TSLA) to Neutral from Outperform, lowering the price target to $213.00 from $309.00, as reported in real-time on InvestingPro.

Tesla's stock fell more than 8% pre-market today following CEO Elon Musk's warning about slower sales growth despite price cuts that have already negatively affected margins. The company's Q4 results missed consensus estimates on the top and bottom lines.

KGI Securities highlighted the company’s guidance of a slower growth rate in 2024 compared to 38% in 2023, as Tesla prepares for its next growth phase with new vehicle models starting production at the end of 2025.

KGI Securities trimmed its 2024 vehicle delivery estimate to 2 million units (up 11% year-over-year), but raised Cybertruck deliveries estimate to 56,000 units. Tesla's recent price reductions for the Model 3 and Y are factored into the analysts’ revised 2024 sales forecast of $101.2 billion, representing a 5% increase from the previous year.

While we foresee gross margin pressure easing when interest rates fall, likely starting in 2H24, R&D investments and ramp up of next-generation vehicles could weigh on gross margin recovery before 2H25F. As a result, we cut 2025F EPS to US$4.68.

Boeing slashed to Neutral at BofA

Boeing (NYSE:BA) experienced a nearly 3% decline in its shares pre-market today, initially triggered by the US Federal Aviation Administration's (FAA) decision to halt planned production increases of the 737 Max, a crucial jet model for Boeing. This downturn was compounded by a downgrade move from BofA Securities.

The bank, reacting to the recent incident involving an Alaska Airlines 737 Max-9 where a door plug was ejected mid-flight, downgraded Boeing from Buy to Neutral. The new price target set by BofA is $225.00, reduced from the previous $255.00.

“The subsequent grounding and FAA mandated production rate freeze at current levels will likely prevent Boeing from reaching its 2025/2026 production, delivery, and FCF goals outlined during its 2022 investor day,” commented the analysts.

Two more downgrades

Hertz Global (NASDAQ:HTZ) shares fell more than 2% pre-market today after JPMorgan downgraded the company to Neutral from Overweight and cut its price target to $11.00 from $17.00, noting that it sees few near-term positive catalysts.

Williams Trading downgraded VF Corporation (NYSE:VFC) to Sell from Hold with a price target of $13.00. As a result, shares dropped more than 3% pre-market today.

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