Daiwa Capital Markets updated its earnings forecast for Tesla (TSLA, Financial) for the years 2023 to 2026, following the release of Tesla's earnings report. The forecast for Tesla's earnings per share (EPS) has been revised upwards to $2.5, $3.2, and $4.05, reflecting a better-than-expected performance in the third quarter and robust operations in autonomous driving and energy storage.
Despite these adjustments, the 2025 EPS forecast implies a 10% sales growth, which falls below market expectations. Daiwa maintains a conservative view on the demand for electric vehicles in the U.S. market and the timing and capacity for the launch of affordable electric vehicles.
The target price for Tesla has been increased from $225 to $285, while the rating remains "neutral." Tesla is expected to conclude the year strongly, with projected deliveries of over 510,000 electric vehicles in the fourth quarter of 2024 and the deployment of more than 10 gigawatt-hours of energy storage equipment. The possibility of starting deliveries of China-assembled Megapacks next year could further enhance the business's gross margin.
