Buy Tesla On Pullback? Global Equities Says We're At Tail End Of Any Production Issues
Global Equities’ Trip Chowdhry believes the pullback in Tesla Motors Inc (NASDAQ: TSLA) shares offers an attractive buying opportunity, especially given that Model X production issues seem to be reaching an end and meaningful catalysts are expected for the remainder of FY16.
The analyst maintained an Overweight rating on the company and 12-18 month price target of $385.
The company reported 14,820 deliveries for 1Q16, below the guidance of 16,000 despite a 50 percent year-on-year increase in deliveries. Deliveries for Model S stood at 12,420, while for Model X were 2,400.
Chowdhry mentioned that Model X’s production rate reached 750 units per week in the last week of the quarter.
Model X Woes Ending
Following conversations with about 80 Tesla customers at the unveil event for Model 3, Chowdhry stated that delivery pickup times for Model X had improved meaningfully.
Customers who had their Model X waiting at a local service station for over days confirmed their Model X pickup was scheduled on or before April 15.
“At the Model 3 unveil event, we got an impression that Model X production had reached about 1,000 Model X's per week,” Chowdhry pointed out.
Catalysts for 2016
Following the Model 3 unveil event, some expect Tesla to hold another event to provide more details, especially related to the huge Space-Age HUD.
The inauguration of Gigafactory is expected between the last week of April and last week of May, while residential stationary deliveries are likely to get into full swing in 2H16.
Latest Ratings for TSLA
|Oct 2016||Goldman Sachs||Downgrades||Buy||Neutral|
|Sep 2016||Cowen & Co.||Initiates Coverage on||Underperform|
|Jun 2016||Argus Research||Downgrades||Buy||Hold|
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