Tesla shares slip ahead of latest earnings release

By Scott Kanowsky

Investing.com -- Shares in Tesla, Inc. (NASDAQ:TSLA) fell in early U.S. trading on Wednesday, after analysts cut their price target for the electric vehicle manufacturer ahead of the company's quarterly results.

Analysts at Morgan Stanley slashed their price target for the stock to $220 a share from $250 but retained its overweight rating. Meanwhile, JPMorgan analysts lowered their price target to $120 per share from $125.

Both banks cited concerns around a decision taken earlier in January by Tesla to decrease the price tag of some of its cars to boost customer demand in an uncertain market environment marked by elevated interest rates and fierce competition.

The JPMorgan analysts called the reductions "drastic," adding that while they will benefit the consumer, they will negatively impact Tesla and other still-unprofitable pure-play EV carmakers.

Tesla is set to report its results for the final three months of 2022 after the close of U.S. trading. Wall Street analysts expect the company to post record profit during the period, although concerns remain over flagging vehicle delivery growth.

Deliveries are seen increased by around 46% in 2023 1.9 million, according to Bloomberg consensus estimates, which would be under Tesla's annual goal of 50% growth. Musk ultimately hopes to expand sales to 20M annually by 2030, which would turn Tesla into the world's largest carmaker.

"[Management is expected] to extol the positive reaction to its recent price cuts, reiterating its long-term language of 50%-type unit growth over time," the Morgan Stanley analysts said.

Attention will also turn to the future of Musk at the company. The billionaire businessman has faced recent criticism from some Tesla shareholders who worry that he is not paying enough attention to the running of the firm since his $44B purchase of Twitter in October.

Tesla shares have slumped by more than 53% over the past one-year period.