It is reported that Tesla, Inc. will release financial results for the fourth quarter and the whole year of 2022 after US stocks opened on January 25, US Eastern time.

In addition to providing guidance for 2023, Tesla, Inc. may also answer the long-feared decline in demand and the extent to which price cuts damage Tesla, Inc. 's profit margins.

2022Q4 performance is about to come out! What do you think of Wall Street?

According to consensus estimates by Bloomberg analysts, Tesla, Inc. 's revenue in the fourth quarter of 2022 was $24.7 billion, up 39 per cent from a year earlier, while adjusted net profit was $4.163 billion, up 44 per cent from a year earlier.

According to tipranks, Tesla, Inc. 's earnings per share have exceeded market expectations in each of the past 12 months, while there is a 75 per cent chance that revenue will exceed expectations.

Zacks analysis of the investment research company believes that the rise in raw material costs and logistics restrictions may cause certain pressure on Tesla, Inc. 's profit margin. Overall, lower-than-expected delivery volumes, capacity disruptions caused by the impact of the epidemic, inflated commodity costs and concerns about the economic downturn are expected to adversely affect Tesla, Inc. 's upcoming quarterly report.

Zacks also expects Tesla, Inc. 's 2022Q4 energy production and storage income to be $1.033 billion, down from $1.12 billion in the previous quarter, while services and other income is expected to be $1.523 billion, down from $1.65 billion in the third quarter.

In addition to the established transcripts, the company's performance guidance for 2023 is also the focus of investors' attention.

For most of 2022, Tesla, Inc. maintained the expectation that "delivery will grow at an average annual rate of 50 per cent in the next few years" and set a global sales target of 1.5 million vehicles in 2022. However, according to data released by Tesla, Inc. in early January 2023, Tesla, Inc. 's total delivery volume in 2022 was 1.31 million, an increase of 40 per cent year-on-year and below the 50 per cent growth target reiterated in the third quarter of last year.

Whether Tesla, Inc. will continue to maintain or adjust the guidance on global sales will be one of the priorities of this financial report. Currently, Wall Street expects Tesla, Inc. to deliver about 445000 vehicles in the first quarter of 2023 and 1.9 million for the whole year.

Based on this expected goal, how the company will increase production capacity, create greater demand and cope with the decline in competitiveness will also affect the market judgment of the value of its investment.

In addition, Tesla, Inc. may be able to look forward to a new face on the earnings call after his performance.

Zhu Xiaotong, president of Tesla, Inc. Greater China, has been promoted to global management and is responsible for Tesla, Inc. 's production operations in the United States, as well as sales, delivery and after-sales work in North America and Europe, according to Reuters. He will continue to hold the top management positions in China and other parts of Asia.

This also means that Zhu Xiaotong will fully take over the delivery of all the major markets of Tesla, Inc., as well as the production business outside Tesla, Inc. 's German factory, with a management level second only to Musk. Zhu Xiaotong is the number two figure of Tesla, Inc.. In an article published in early January, Bloomberg said that shareholders were extremely dissatisfied with Musk's excessive investment in Twitter and asked the latter to make his successor clear, so Zhu Xiaotong's role was all the more important.

Whether Zhu Xiaotong can help Musk and lead Tesla, Inc. to turn the corner and get back on track will be the focus of attention next. Some media have pointed out that perhaps this new character will show up on this conference call.

The target price before performance has been halved! What is Wall Street worried about?

On Tuesday, Jefferies, the US investment bank that has long been bullish on Tesla, Inc., cut its target price by nearly half: 49 per cent from $350to $180.

In addition, Jefferies also cut Tesla, Inc. 's sales and profit forecasts. Jefferies cut Tesla, Inc. 's earnings forecast for 2023 by 21% to $99.4 billion; earnings per share are expected to be $3.61, 17% lower than consensus. The bank also cut Tesla, Inc. 's sales forecast for 2023 by about 15 per cent to 1.74 million vehicles, in part because it expects demand for Model 3 and Model Y cars to fall.

Analysts at Cowen, an investment bank, also reduced Tesla, Inc. 's target price to $122 from $205. The bank said investors' attention was turning to profit margins on January 25, which had been significant positive at the Austin and Berlin factories, but lower car prices added uncertainty to profit margins in 2023.

Overall, analysts at several investment banks believe that the slowdown in Tesla, Inc. 's delivery growth could mean lower fixed cost absorption, hurting the company's profit margins. Tesla, Inc. has been providing discounts such as subsidies at the time of delivery, which also reduces the income provided for the company by each sale. These disadvantages provide a good reason for them to lower their target price for the company.

Tesla, Inc. still dominates the US electric vehicle market as of the third quarter of 2022, with a market share of about 61 per cent, according to Sipp Global Mobility. But its lead has narrowed in recent quarters as competitors introduce more battery-powered alternatives. In the face of economic uncertainty, rising interest rates and increased competition in the electric vehicle market, Tesla, Inc. 's ability to maintain growth this year will be further tested.

Edit / phoebe