Here’s Goldman’s “most important takeaway” from Musk’s earnings call

Goldman Sachs sees an electrified move in Tesla (TSLA) stock over the next twelve months.

Analyst Mark Delaney, who maintained a Buy rating and a $200 price target on the stock, reiterated his case in a note following Tesla’s earnings Wednesday. The price target assumes an upside of around 25% from the current levels of the stock.

“Given investor focus on Tesla’s delivery volumes in particular (and the importance of volume to its vertically integrated model and the long-term cost benefits of its new factories when they are large-scale),” he wrote Delaney, “we see the strength of the orders as the most important takeaway from the call.”

A truckload of Tesla cars leaves the Tesla plant on Tuesday, May 12, 2020 in Fremont, California.  Tesla CEO Elon Musk has emerged as a champion in defying stay-at-home orders meant to stop the spread of the coronavirus, even garnering support as critics on social media.  Among the supporters was President Donald Trump, who tweeted on Tuesday that Tesla's factory in the San Francisco Bay Area should be allowed to open despite health department orders to remain closed except for base operations.  (AP Photo/Ben Margot)

A truckload of Tesla cars leaves the Tesla plant on Tuesday, May 12, 2020 in Fremont, Calif. (AP Photo/Ben Margot)

The bullish note on Tesla comes after the company reported mixed fourth-quarter and full-year outlooks.

Tesla’s fourth-quarter gross profit margin was 23.8%, below estimates of 25.4%. Automotive gross profit margin was 25.9%, versus analyst estimates of 28.4%.

During his earnings call with investors, Tesla CEO Elon Musk did his best to sound enthusiastic about Tesla’s business.

He also addressed concerns about demand, saying, “So far in January, we’ve seen the strongest year-to-date orders in our history.” However, she also warned of a “major” recession this year.

The economic warning appears to have fed into Tesla’s 2023 volume growth forecast of 38%, which fell below a long-term goal of 50%.

Musk also announced that production of the Cybertruck would be delayed until the summer, with “volume production” starting in 2024.

Despite the uncertainties, Tesla shares were up nearly 11% on Thursday as investors favored Musk’s comment on near-term demand trends.

“We continue to believe the company is well positioned for long-term growth given its leadership position, both in terms of its cost structure and as a provider of total clean mobility solutions,” said Delaney.

The finer points of the earnings call, however, have led others on Wall Street to take a more measured view of the stock.

For example, Guggenheim analyst Ronald Jewsikow has maintained a Sell rating on Tesla stock.

“We are a little surprised to see shares higher after the market with sizable negative revisions likely to FY23/24 EPS and gross margins,” Jewsikow wrote in a client note. “We continue to believe that price recovery on 3/Y will be challenging and protracted and that investors will need to recalibrate valuation for a reset growth algorithm over the next few years.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and go LinkedIn.

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