Tesla Stock: 2024 EPS estimates continue to decline. The EV Giant is now raising prices.

Tesla (TSLA) announced over the weekend that it will increase US Model Y prices on April 1 while also raising Model Y prices in Europe on March 22. Meanwhile, the global electric vehicle giant is also currently offering new stock discounts for Model Ys in China. Tesla shares rebounded early Monday.

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The company will increase the price of all Model Ys in the US by $1,000 next month, while Model Y prices in Europe will rise by about $2,100 on Friday. In China, Tesla is offering discounts on Model Y inventory ranging from $1,000 to $1,500.

The pricing move comes after Tesla, to maintain sales momentum, aggressively reduced car prices and offered discounts for more than a year. As a result, automotive gross profit margins, which peaked at 30% in the fourth quarter of 2021 amid the industrial chip shortage, have fallen to well below 20%.

Analysts say this strategy does not help demand and harms the company. Tesla watchers report that inventory is currently very high and that the electric car giant's price hikes do not indicate high demand.

Troy Teslick, a respected source for delivery estimates and Tesla data tracking among Tesla retail investors, wrote on

“Based on the latest data, inventory is currently high,” Teslik said. “Tesla's message is to buy now before the raise.”

Tesla is declining, but it is not getting cheaper. And here's why.

With the first quarter ending in just two weeks, Tesla appears to be headed toward a delivery failure. The Wall Street consensus still currently includes first-quarter deliveries of 487,000 units, according to FactSet. However, several analysts have lowered their forecasts in recent days.

Tesla is expected to announce first-quarter deliveries in early April.

Tesla stock performance

TSLA shares rose 2.7% to 167.81 during Monday's market action. Last week, Tesla stock fell 6.7% to 163.57. On Thursday, Tesla stock fell 4.1% to 162.50, hitting new lows for 2024 and levels not seen since May 2023. TSLA stock fell 19% in March.

Wells Fargo downgraded Tesla to underweight, from equal weight, last week with a price target of 125, down from 200. The company's underweight rating is equivalent to a sell rating and its price cut represents a 23% downside risk to current TSLA levels.

Meanwhile, UBS also cut Tesla's stock price target to 165, from 225, and maintained a neutral rating on the stock last week. UBS cut its first-quarter delivery forecast to 432,000 units, from its previous forecast of 466,000. The company also cut full-year deliveries to 1.96 million units, from 2.02 million previously.

With 2023 in the rearview mirror, the analyst consensus now points to Tesla's 2024 earnings being below the 2023 level, suggesting another year of negative growth for this growth stock. Wall Street expects Tesla to generate earnings of just $2.97 per share in 2024, according to FactSet. That would be a decline of about 5% versus $3.12 a year ago.

FactSet calls the “sharp consensus” of recent analysts pegging 2024 EPS at just $2.62.

Morgan Stanley Tesla bull Adam Jonas recently issued an investment note in which he cut Tesla's 2024 earnings forecast by 25%, saying the electric car giant could “likely” lose money this year.

Jonas cut his Tesla stock price target to 320, down from 345, but maintained an overweight rating on the stock. Jonas also trimmed his forecast for Tesla 2024 EPS to $1.51, his previous view of $2.04 per share, with auto gross profit margins, excluding regulatory credits, falling to 11.4% as the analyst expects EV demand issues to persist.

The electric vehicle giant ranks eighth in the 35-member IBD Automotive Manufacturers Industry Group. The stock has a 28 Composite Rating out of the best possible 99 ratings. Tesla stock also has a 9 Relative Strength Rating and a 68 EPS Rating.

sRent to follow Kit Norton on X, formerly known as Twitter, @kitnorton For more coverage.

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