Bernstein says 2024 consensus EPS for Tesla ‘may be aggressive’

Bernstein notes Tesla reported Q3 deliveries of 435K, below sellside consensus of 455K, and guidance that hinted at flat to up deliveries. The firm believes buyside expectations were more muted, given pushed out Model 3 Highland deliveries. Per usual, auto gross margins ex-credits are a key question. Bernstein models 18.1% vs. consensus of 18.5% but sees potential downside given lower volumes, relatively material discounts on cars sold out of inventory and steep Model X and S price downs during the quarter. Given demand weakness and an absence of new high volume offerings, the firm believes that Tesla will have to further reduce prices next year to drive volumes, impacting margins – and accordingly thinks fiscal 2024 consensus EPS of $4.26 may be aggressive. Bernstein has an Underperform rating on the shares with a price target of $150.