Tesla price target lowered to $270 from $355 at Deutsche Bank

Deutsche Bank analyst Emmanuel Rosner lowered the firm’s price target on Tesla to $270 from $355 and reiterates a Buy rating on the shares. The analyst reduced his Q4 deliveries estimate for Tesla to 420,000 units, reflecting some macro weakness particularly in China, as well as postponement of deliveries to Q1 of 2023 in the U.S from some consumers in order to benefit from Inflation Reduction Act incentives. At the same time, Rosner cut gross margin expectations from up 100 basis points quarter-over-quarter to down 30 points, reflecting some sequential improvement in factory ramp cost but largely offset by recent price cuts and incentive offerings in China, U.S. and Europe. This leads to a Q4 earnings per share estimate of $1.05, down from $1.18, and below current Street estimate of $1.25. Beyond the quarter, Rosner continues to expect "challenging headlines" around demand softening and associated price cuts. However, Tesla "remains best positioned to weather the current macroeconomic conditions, leveraging price to support volume growth and various cost levers in place to protect margins," writes Rosner. He cut the price target to reflect Tesla’s "near-term challenging narrative which is compounded by noise from the recent Twitter acquisition."