Tesla Inc. stock rallied Monday after a few Wall Street analysts praised the Silicon Valley electric-car maker’s above-consensus sales, including an upgrade from Wedbush Securities.
Wedbush analyst Dan Ives on Sunday upgraded Tesla stock to the equivalent of buy, from neutral, and raised his price target on the stock to $1,000, from $950. That implies an upside of more than 40% over Monday prices. Ives raised his long-term “bull case” on Tesla to $1,300.
“In our opinion the 1Q delivery numbers released on Friday was a paradigm changer,” he said in a note.
Tesla reported first-quarter deliveries, its proxy for sales, on Friday, saying it sold 184,800 vehicles, blowing past the FactSet consensus of 168,000. The Silicon Valley electric-vehicle maker said it produced just over 180,000 vehicles in the period in what Ives, in a previous note, called a “drop the mic” number.
“We now believe Tesla could exceed 850k deliveries for the year with 900k a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector,” Ives said Sunday. He added “eye popping delivery numbers coming out of China cannot be ignored with the trajectory on pace to represent ~40% of deliveries for Musk & Co. by 2022.”
Ives was not alone in praising Tesla’s sales for the quarter. Analysts at JPMorgan raised their price target on Tesla shares to $155, from $135, and tweaked higher their estimates for the company’s first-quarter profit and yearly sales.
JPMorgan said it expects total deliveries of 800,000 Tesla vehicles this year, 1 million in 2022, and 1.23 million in 2023, “which is modestly below” consensus estimates due to “growing competition,” the analysts said.
They forecast first-quarter per-share earnings of 90 cents a share, up from a previous EPS expectation of 84 cents a share and compared with FactSet consensus of an adjusted EPS of 93 cents a share in the quarter.
Jeffrey Osborne at Cowen highlighted Tesla’s first-quarter production numbers. “We were pleased to see production at 180,338 for the quarter, suggesting that the lingering semiconductor shortage plaguing other auto OEMs is not affecting Tesla in a big way despite the two shutdowns at Fremont in February,” he said.
Osborne also raised his price target on the stock, to $573 from $545, and kept his rating on the share at the equivalent of hold.
Joseph Spak at RBC Securities also tweaked his expectations for Tesla’s first-quarter results. He moved his revenue expectations lower, to $10.5 billion from $10.8 billion, “mostly on lower (Model S/Model X) deliveries.” His expectations for adjusted EPS moved lower as well, to 88 cents from 97 cents.
The “midterm debate” between bulls and bears on Tesla is likely to continue, he said.
Analysts at B. of A. also struck a more cautious note, highlighting that while sales more than doubled year-over-year, they rose just about 2% quarter-on-quarter.
“And while this may have been dragged down by transitory dynamics like the next-generation Model S launch, we believe a burden of proof remains for the company (given its substantial market cap and valuation premium) in demonstrating that it can continue to drive accelerated growth,” the B. of A. analysts, led by John Murphy, said in their note.
Tesla’s ability “to drive further accelerated growth will be dependent on its ability to introduce refreshed (Model S/X) or all-new (Model Y, Cybertruck) product and build out capacity (Austin, Berlin, etc.), which we expect will require incremental capital in the future, even beyond the $10bn in at-the-market equity raises executed upon in 2020,” they said.
Tesla shares are down 1.5% year to date, but have skyrocketed 623% over the past 12 months, which compares with an advance of 64% for the S&P 500 index
SPX,
in the last 12 months.
