Tesla stock extends drop in New Year, ‘becoming long-term hold’

Tesla stock is trading lower in 2023. Fourth quarter delivery numbers came in below analysts' estimates.

The Jan. 2 release showed deliveries for the electric vehicle maker missed by roughly 13,000. According to the report, Tesla delivered 405,000 vehicles over the quarter, falling short of consensus forecasts of 418,000. 

Deliveries for the Model S/X rose 9%; Model 3/Y deliveries grew 4%.

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While fourth quarter figures pushed Tesla's 2022 deliveries to 1.3 million to notch 47% growth year-over-year, the total was still below the company's 50% guidance.

In an interview with FOX Business, Edward Moya, a senior market analyst at OANDA in New York, said "Tesla share prices remain in freefall as deliveries struggle, Musk remains CEO of Twitter, and recession fears weigh on the EV demand outlook for the rest of the year."

"Tesla is becoming a long-term hold, but there could still be more pain to come," he added. "The growth opportunity abroad is still there, but rising competition will make this a tough rebound once Tesla shares find a bottom."

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J.P. Morgan lowers expectations for Tesla in 2023

In a report Monday, JPMorgan analyst Ryan Brinkman said the investment bank was lowering its estimates and price target following Tesla’s miss on deliveries "which tracked modestly higher than our model but seemingly at the cost of higher incentives, suggesting lower pricing and margin."

"We are not materially lowering our estimates today (2023 goes to $4.60 from $4.84, 2024 to $5.15 from $5.35, and 2025 to $5.55 from $5.65) although we are reducing our December 2023 price target to $125 from $150 on expected multiple compression as growth expectations moderate," Brinkman stated in the report.

Tesla reported 2021 basic earnings per share of $5.60. The company reports 2022 fourth quarter and full year results on Jan. 25.

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