First Of Many Wall Street Cuts For Tesla? Fund Manager Sees Domino Effect In Motion After Deutsche Bank Lowers Delivery Estimate

Zinger Key Points
  • Gary Black doesn't see price cuts helping volume as Tesla's competitors will likely match the cuts.
  • As Black's flagship Future Funds Active ETF shed Tesla stake last week, the stock's weighting fell from 5%+ to just under 3%.

Future Fund Managing Partner Gary Black‘s prediction of lowered delivery estimates for Tesla Inc. TSLA proved accurate as Deutsche Bank took the lead, tempering expectations ahead of the electric-vehicle giant’s first-quarter deliveries update in early April.

What Happened: Deutsche Bank reduced its first-quarter deliveries estimate for Tesla from 476,000 units to 427,000 units, Black said in a post on social media. The firm also lowered its 2024 delivery forecast from 2.083 million units to 1.960 million units.

“We expect other analysts to do the same over the next two weeks,” Black said. He anticipates Tesla’s first-quarter sales to be around 425,000 units, compared to the current consensus of 474,000 units.

Black reiterated his previous call for a reduction in the consensus estimate.

See Also: Everything You Need To Know About Tesla Stock

Price Cuts Ineffective: Responding to a follower who suggested price cuts by Tesla to boost sales, Black argued that such a move wouldn’t be effective. “Cutting price does not put more hardware on the road since competitors generally match TSLA's price cuts,” Black said.

Black’s Future Fund Active ETF FFND reduced its Tesla holding from over 5% to under 3% last week, anticipating estimate cuts.

Tesla shares remain volatile amid these uncertainties. On Monday, the stock rose 1.39% to $177.77, according to Benzinga Pro data. It has traded within a 52-week range of $152.37 – $299.29.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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