Tesla Price Reductions for EVs Ignite Bull-Bear Debate on Wall Street

Jan 22, 2023

Tesla Price Reductions

Tesla lowered prices considerably this month in the United States and beyond. There is no agreement on Wall Street about how this will impact profits or the company's stock. However, the one thing that all analysts agree on is that Tesla will sell more EVs.

On Wednesday evening, Piper Sandler strategist Alexander Potter reduced his price target for Tesla shares from $340 to $300 while maintaining a Buy rating. One explanation for why he is bullish on the stock is because, with reduced pricing, Tesla can increase supply numbers by more than 50% this new year.

In 2022, Tesla shipped more than 1.3 million EVs. Before the price reductions, Wall Street expected around 1.8 million units to be sold in 2023. Sales expectations have already risen to 1.9 million units, representing a 45% increase from 2022.

In fact, the estimate now ranges between 1.7 million and 2.1 million.

Even with larger supply volumes, the reduced prices might lead to fairly low company profits if expenses do not match revenues. However, as Potter noted in his report, he "wouldn't be surprised" if profit margins were higher than predicted.

According to FactSet, Wall Street now forecasts 2023 operating profits of around 17.2%. This contrasts with previous estimates of around 19.8% before the price reductions were revealed.

Operating profit margins for Tesla are expected to reach 17.3% in 2022. On January 25, the fourth-quarter results will be released. The operating profit margin for the fourth quarter is expected to be 18.3%.

Reduced operational profit and profit margin expectations for the current year have contributed to lower earnings-per-share expectations. Wall Street now forecasts earnings per share of around $4.85 in 2023, which is lower than the $5.50 forecast before the price decrease.

Earnings-per-share expectations for 2023 vary from around $3 to $8, lower than the range of $4 to $8 before the price decreases. According to FactSet, 26 out of 40 experts have reduced their expectations in recent weeks. The top estimates are stale.

Finally, target prices have fallen in line with earnings projections and share prices. With Potter's reduction, the average expert price target is now around $214, about $100 less than three months ago.

The highest price targets are around $300, similar to Potter's. Even before the price cuts, New Street Research researcher Pierre Ferragu had the highest analyst price target. His previous target was $530 per share, but he reduced it to $320 earlier this January.

The minimum price targets are in the $85 area. The low-to-high gap is now almost $230 — nearly 200% of Tesla's current share price. For Toyota Motor shares, for example, the bull-bear gap is 50% of the current market price.

On Wall Street, Tesla continues to be a controversial stock. There is not much agreement among analysts about the company.

Tesla stock has gained roughly 4.3% since the price reductions made in the United States around January 12. Over that period, the S&P 500 and Nasdaq Composite fell 1.3% and 0.4%, respectively.

Tesla's success shows that investors were prepared despite Wall Street's projections.

Subscribe Our Newsletter

Ethereum Dencun Upgrade Drives Network Evolution

Nato

Ethereum Dencun Upgrade 2024: Prepare for Biggest Update Since the Merge

Get ready for the Ethereum Dencun upgrade, set to revolutionise Layer 2 networks and potentially drive ETH prices to new heights.

Euro vs Dollar: What Impacts Exchange Rates?

Nato

Euro vs Dollar: Political Uncertainty and Economic Data Impact Exchange Rates

Explore the current euro vs dollar exchange rate trends, the impact of political uncertainty on the euro, and factors contributing to the USD decline.

Banks and Finance
B2BROKER Liquidity B2BROKER Liquidity
Sponsored
Alexander

How to Spot Cryptocurrency Scams
The cryptocurrency world is still relatively new and uncharted territory. Many of the concepts at play in this new economy can be complex and difficult to understand. This can make it challenging for those who are new to the space to get a grasp on how everything works.

discover
How to Provide Liquidity to Cryptocurrency Exchange?

Oliver

How to Provide Liquidity to Cryptocurrency Exchange?

Cryptocurrency is already changing the face of trading. Due to the greater demand for crypto assets, new exchanges are hitting the market with promised convenience and features. However, every cryptocurrency exchange requires liquidity.

Liquidity
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiriesb2broker

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Hazem

    MetaTrader vs cTrader: Which Trading Platform Shall You Choose?

    MetaTrader vs cTrader: The Full Breakdown

    Сonstantine

    Will Dogecoin Reach $1? Tokenomics and Price Analysis

    Will Dogecoin Reach 1 Dollar Analysis

    Сonstantine

    How to Get a Crypto Exchange License?

    How to Get Crypto Exchange License

    Сonstantine

    Best Crypto to Buy Now: Guide for Investors

    Best Crypto To Buy Now

    Hazem

    Grok vs ChatGPT: What’s the Best AI Assistant You Need in 2025

    Grok vs ChatGPT

    Сonstantine

    How to Choose the Right Liquidity Provider for Your Brokerage

    How to Choose the Right Liquidity Provider for Your Brokerage

    Сonstantine

    Low-Latency Trading Defined: Speed, Strategy and Technology

    Low-Latency Trading Explained

    Hazem

    How Liquidity Depth Affects Slippage in High-Volume Trading

    Liquidity depth and slippage in trading

    Hazem

    What is FIX API Liquidity Connection and How Does it Power Institutional Trading?

    FIX API in institutional trading

    Сonstantine

    OTC Trading Strategies and Technologies to Succeed in Over-the-Counter Markets

    OTC Trading Strategies

    Alexander

    What is OTC Trading? A Complete Guide for 2025

    what is OTC

    Alexander

    Synthetic Futures: A Trader’s Guide to Replicating Positions with Options

    How to Trade Synthetic Futures

    Сonstantine

    Order Book Depth: What It Is And Why It Matters?

    Order Book Depth What It is And Why It Matters

    Alexander

    Spot vs Perpetual Futures: Which Is Right for You?

    Spot vs Perpetual Futures explained

    Hazem

    5 Reasons Traders Are Switching to Perpetual Futures

    5 Reasons to Switch to Perpetual Futures

    Constantine

    Top 3 Liquidity Challenges Facing New Exchanges and How to Solve Them

    Top 3 Liquidity Challenges Facing New Exchanges Today

    Constantine

    Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

    Financial Planning in the Cryptocurrency Era

    Hazem

    Best Platforms to Trade Perpetual Futures in 2025

    Best platforms to trade perpetual futures in 2025

    Alex

    Top 10 Fintech Website Development Agencies for 2025

    Best Fintech Website Development Agencies for 2025

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.