J.P. Morgan cuts estimates on Tesla , 'plenty of further downside potential'

investing.com:

J.P. Morgan reiterated an Underweight rating on Tesla (NASDAQ:TSLA) and cut their 12-month price target on the auto stock to $130.00 (From $135.00) after the company reported weaker than expected earnings for the sixth straight quarter, and lower YoY profits for the fourth straight quarter, on Wednesday.

“Tesla profit expectations have fallen, but even after Thursday’s sell-off, the stock to us seems in comparison to have hardly noticed, suggesting plenty of further downside potential.” Wrote J.P. Morgan analysts in a note.

Tesla reported revenue of $25.17 billion in the 4Q, just under the consensus estimate of $25.87 billion. The automotive gross margin, excluding regulatory credits, stood at 17.2%, aligning closely with the consensus of 17.0%. While this marked an improvement from earlier in the year, it's notably lower than the 24.3% margin a year ago.

Despite gross profit being generally in line with expectations, operating profit fell short at $2.06 billion (8.2% margin), compared to the consensus of $2.28 billion (8.8%).

Analysts have revised their estimates for Tesla, projecting a 2024 EBIT of $11.3 billion, down from the previous estimate of $12.8 billion, and a 2025 EBIT of $15.1 billion, reduced from the earlier forecast of $15.5 billion. The adjusted expectations also include a revised 2024 EPS of $3.35 (compared to the updated consensus of $3.37), down from the previous figure of $3.90. Additionally, the 2025 EPS is now estimated at $4.25 (versus the updated consensus of $4.55), down from the prior estimate of $4.50.

Shares of TSLA are up 1.49% in pre-market trading Friday morning.