Goldman Sachs remains bullish after cutting price target on Tesla

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By Michael Elkins 

Goldman Sachs reiterated a buy rating on Tesla (NASDAQ:TSLA) and lowered the price target to $235.00 (from $305.00) after lowering estimates to reflect softer supply and demand.

Goldman now assumes 420K deliveries in 4Q22 (from 440K prior) and 1.85 million units in 2023 (from 1.95 million prior). They are also now expecting a slight sequential decline in non-GAAP gross margin in 4Q22 vs. 3Q22 given the pricing/incentive actions Tesla has instituted during the quarter.

Goldman Sachs lowered 2022/2023/2024E EPS estimates with SBC to $3.60/$4.50/$5.60 from $3.73/$4.90/$6.00 on lower units, lower vehicles ASPs, and lower margins. Excluding SBC Goldman Sachs models 2022/23/24/25 EPS of $4.05/$5.00/$6.20/$7.65.

Analysts wrote in a note, “media reports such as one from Bloomberg have noted that with the CEO, Elon Musk, currently taking a larger role on Twitter and political topics, Tesla’s brand has become more polarizing. We believe that Tesla’s brand has significant value related to the company’s leadership position in clean energy and advanced technology. Having consumer focus related to Tesla shift back to these core attributes of sustainability and technology will be important in our view if Tesla is to meet or exceed long-term investor expectations for Tesla.”

Shares of TSLA are down 0.43% in pre-market trading on Wednesday.