More price cuts could hinder Tesla’s earnings, according to Goldman Sachs. The firm lowered 2023 and 2024 full-year adjusted earnings per share estimates on the premier electric vehicle maker in a Sunday note, while reiterating a neutral rating and a $275 per share price target. Goldman’s forecast equates to less than 1% upside from Friday’s $274.39 close. Tesla stock has surged more than 122% from the start of the year. TSLA YTD mountain Tesla stock from the start of 2023. Analyst Mark Delaney now forecasts $2.90 and $$4.15 per share the remainder of 2023 and into 2024, down from $3 and $4.25, respectively. The analyst attributed the downgrade to Tesla’s drive for higher production, which he says will continue to hit gross margins before accounting for vehicle incentives and tax credits. “We believe that Tesla could further lower prices in 2024 to support higher volumes which we believe will mitigate the EPS benefit from cost reductions,” Delaney said. Still, Delaney says near-term headwinds are overshadowed by Tesla’s standing as the dominant EV maker in the sector. “We are Neutral rated on the stock, with our expectation for near to intermediate term margin headwinds offset by our positive view of Tesla’s leadership position in the industry and long-term growth potential (including with software, services and opportunity in related markets like Energy),” he said. — CNBC’s Michael Bloom contributed to this report.
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