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Tesla Q4 2022 Earnings Preview: Is Too Much Negative News Baked in the Price?

By Justin Mcqueen

17:52, 19 January 2023

Tesla outlook
Tesla outlook - Photo: Capital.com. Source: GettyImages

Estimated Earning Figures

  • EPS $1.13
  • Revenue $24.16bln

Tesla (TSLA) will deliver its Q4 2022 results on January 25th, after the Wall Street close. The estimates are for an EPS of $1.13 with a revenue of $24.16bln. A reminder that earlier in the month, Tesla had announced their Q4 deliveries, which were up 31.5% y/y and 18.5% q/q at 405k, however, missed expectations of 420k. Consequently, this marked the second consecutive quarter that Tesla deliveries underwhelmed estimates highlighting that demand for cars has been slowing given the backdrop of supply chain issues and economic uncertainty. 

In another sign that demand for cars has softened, the EV company has announced a number of price cuts globally on its vehicles by as much as 20% in a bid to boost market share. Now while traders didn’t react to positively to the recent announcements made by the company, I suspect heading into its financial results sentiment is perhaps a little too bearish. To me, this would suggest that a lot of the negative news has already been reflected in the price and thus bar to surprise on the upside is low.  

Broker Recommendations

BTC/USD

67,771.10 Price
-2.690% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Oil - Crude

78.78 Price
+0.420% 1D Chg, %
Long position overnight fee 0.0094%
Short position overnight fee -0.0313%
Overnight fee time 21:00 (UTC)
Spread 0.040

Gold

2,351.21 Price
+0.030% 1D Chg, %
Long position overnight fee -0.0195%
Short position overnight fee 0.0113%
Overnight fee time 21:00 (UTC)
Spread 0.30

XRP/USD

0.53 Price
-2.290% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168
Tesla Broker RecommendationsTesla Broker Recommendations - Photo: Capital.com. Source: Refinitiv

Tesla Technical Analysis

As can be seen in the chart, Tesla shares have bounced from deeply oversold levels. In fact, the RSI had fallen to a record low of 16 in December and thus the recovery appears to be more corrective at this stage. What is somewhat encouraging for dip buyers is the break above resistance at 123.00-124.50, which will need to hold in order to suggest that there is a window for a more persistent recovery in Tesla. Should we see a hold of prior resistance, now support, there is room for a move towards 150.

Tesla Chart: Daily Time Frame

Tesla ChartTesla Chart - Photo: Capital.com. Source: Tradingview

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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