Bernstein is warning of a “tough” road ahead for Tesla (TSLA) in 2024. Bernstein’s Toni Sacconaghi believes the EV automaker’s could fall nearly 40%, arguing that the company’s margins will continue to be squeezed and will “disappoint on volumes.”
Yahoo Finance’s Madison Mills in reporting Live from the New York Stock Exchange to deep dive into this note—and takes a closer look at BYD’s (1211.HK) dominance in the EV world.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Eyek Ntekim.
Video Transcript
SEANA SMITH: Tesla shares, falling in pre-market trading after Bernstein warning of a– quote, “tough road ahead for Tesla.” The analysts behind that call, warning that shares could plunge 40%. Madison Mills is on the floor of the New York Stock Exchange with more on what we’re hearing from Bernstein. Mady.
MADISON MILLS: Yeah. So this is not necessarily a huge change from what we’ve heard from this analyst previously. He’s been pretty bearish on Tesla over the course of 2023, even back in December, saying that this was the best stock to short heading into 2024. But having said that, reiterating that $150 price target. And that would be a 40% plunge for this name. Now the thinking here from Toni is that volumes and sales are going to continue to be a challenge.
They’re going to put pressure on Tesla’s margins and reiterating that again after the news that we’ve gotten from Tesla this week regarding how those sales have done just a little bit of a beat on those electric vehicle deliveries but not enough to see a lot of upside from the market reaction here. I’m just taking a look at this stock performance pre-market down, just about 1.5% almost in the pre-market trade. But Tesla, not having that bad of a day yesterday compared with some of the other big tech names that we’ve seen. So we’ll see whether or not that continues to be the story in their trade that dominates this name today.
MYLES UDLAND: Now Mady, also related to Tesla yesterday, we saw some news out of BYD. And really, the fundamental story here in the overall EV market changing a little bit. Tell us more about that.
MADISON MILLS: Yeah. So BYD taking over as the biggest EV name here, topping Tesla’s sales and deliveries as well. But having said that, Tesla did perform very well in China. Their year-over-year deliveries– sales rather, at 40% growth year-over-year. So that’s obviously a win for them. Dan Ives this morning saying that it’s just that BYD is a beast in China, so it’s difficult for Tesla to match up there. But from an investor perspective, look, they’re not investing in Tesla’s returns in China. They’re investing in Tesla as a global company.
So can they go all in on this narrative that Tesla did do well in China even when you look globally at this name and you see that BYD is taking up more of their market share? But as always, Myles, it depends on where you look for the data. If you look at Ford and GM cutting back on their EVs, you have to wonder whether American buyers are saying to themselves, look, do I want an EV? Or do I want a Tesla? And that could be a boon for them this year.
MYLES UDLAND: All right. Mady Mills live on the floor of the New York Stock Exchange.