Tesla, Inc. TSLA shares might drop further on Friday due to more price reductions in China. The company cut the prices of its Model 3 electric vehicles by 2-5% on Friday, despite hopes from investors that such profit-hurting moves would stop.
Future Fund’s Gary Black said that analysts might now decrease their estimate of Tesla’s 2024 earnings by $1 billion or 25-30 cents per share. He also lowered his own estimate for Tesla’s 2024 earnings by 7%, from $4.20 to $3.90 per share.
To make things worse, Black doesn’t expect Tesla to sell more cars because of these price cuts. He thinks that other Chinese car companies will also lower their prices. The combination of these new price cuts and the lower earnings estimate is likely to cause Tesla’s stock to drop on Friday, according to Black.
Black predicts that Tesla will sell 756,800 cars in China in 2024, compared to 605,500 cars sold in 2023. He believes that about 90% of these will be the Standard Range version of the Model 3.
In 2023, Tesla reduced prices globally, which led to lower profits and disappointed investors. People were hoping that profits would get better in 2024, but these new price cuts are not a good sign for Tesla’s stock.
In premarket trading, Tesla stock fell by 3% to $220.40, according to Benzinga Pro data. It lost 2.87% on Thursday, closing at $227.22, the lowest point since mid-November. So far this year, Tesla’s stock has lost 8.6%, undoing a small part of the 101% gain it had in 2023.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Related Link: ‘Credits To The Tesla Team:’ Elon Musk Applauds His Workers As EV Giant Eclipses Legacy Automakers’ Sales Growth Over 8 Years
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
