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Bearish Tesla (NASDAQ:TSLA) analysts of GLJ Research see a potential “Valentine’s Day Massacre” for the stock following weak China deliveries for the Feb. 6th to Feb.12th period, suggesting the recent price cuts in the all-important country are not working.
The analysts highlighted Tesla sold just 6.963K cars in China domestically this week. This, they note, is just a fraction of the roughly 17.734K adjusted cars/week Tesla produced in Shanghai in January 2023, or just 39%.
Based on this, the analysts said they see Tesla Q1 China sales coming in around 90K, or down -25.8% QoQ and well below the consensus of ~129K cars, domestically, in China in Q1.
“Stated more clearly, should TSLA’s 1Q23 domestic China sales come in below and/or around 100K, as the data currently suggests it will, we believe the stock would come under acute selling pressure,” they commented.
“At risk of stating the obvious, should our back-of-the-envelope EPS estimate of $3.02/shr for 2023E prove accurate, we believe TSLA’s stock would, in the spirit of today’s holiday, experience a “Valentine’s Day Massacre“, seeing a precipitous rerating lower through 2023E as the current non-GAAP 2023E Consensus EPS estimate of $4.12/shr adjusted lower,” the analysts added.
GLJ Research analysts said they would be adding to the Tesla short on this morning’s China weekly insurance sales figures, with the caveat that should the January CPI come in below expectations, all stocks will likely rally sharply.
