In a recent report, Jefferies analyst Philippe Houchois suggested that Tesla should consider canceling the much-anticipated Cybertruck, stating that such a move would have a positive impact on the company's stock. This recommendation comes as Tesla prepares for preliminary deliveries of the Cybertruck at the end of November.

Houchois lowered his firm's price target for Tesla stock (TSLA) from $250 to $210, while maintaining a hold rating on the shares. In his analysis, he highlighted that with 2024 expected to be a challenging year for growth, shelving the Cybertruck would allow Tesla to refocus on its core strengths of simplicity, scale, and speed.

The market reaction to Houchois' report was evident, as Tesla's stock edged down 0.3% to $233.50 in above-average volume during Monday's trading session. Despite this slight dip, TSLA has already gained nearly 17% in November, driven by the anticipation of Cybertruck deliveries scheduled to begin on November 30.

The pessimism surrounding Tesla's recent performance stems from its third-quarter earnings announcement, which revealed worse-than-expected results. The company reported a 37% decline in earnings to 66 cents per share, the lowest in two years, while quarterly revenue increased by 9% to $23.35 billion. Tesla's auto gross profit margins also fell, coming in below the targeted floor of 20%.

During the earnings call, CEO Elon Musk expressed caution about the upcoming Cybertruck launch and the broader economic climate. Following his remarks, Tesla's stock tumbled 9.3%. Musk warned that there would be significant challenges in achieving volume production with the Cybertruck and estimated that it would take 12-18 months before the vehicle becomes a significant cash flow contributor.

Morgan Stanley analyst Adam Jonas further added his perspective, emphasizing that Tesla needs to stop missing consensus earnings-per-share estimates and successfully launch new vehicles, including the Cybertruck, to regain market confidence. He also emphasized the importance of Tesla demonstrating a shift toward licensing and software as part of its business model.

Despite the concerns raised by analysts, Tesla remains committed to its goal of delivering 1.8 million vehicles in 2023. As the company starts to ship the Cybertruck, it recently unveiled the new Model 3 in China and began official sales on October 19. Tesla has already delivered approximately 1.3 million vehicles globally this year, and with the record Q4 target of 480,000 deliveries, it aims to surpass its previous quarterly high of 466,000 deliveries.

While there have been some downward revisions in analyst projections since the Q3 earnings announcement, Tesla's stock has still performed strongly in 2023. With a 90 Composite Rating out of a possible 99, Tesla stock ranks sixth in the IBD automaker industry group. Presently, Wall Street consensus expects 2023 vehicle deliveries to total 1.79 million, slightly below the company's target.

As Tesla gears up for the much-awaited Cybertruck deliveries, the decision to continue or cancel the vehicle remains a topic of intense speculation. Ultimately, only time will tell whether Jefferies analyst Houchois' recommendation will become a reality and how it will impact Tesla's stock performance moving forward.