Credit Suisse Hikes Tesla Target To $280 After Delivery Miss, Expects Strong Back-Half Of 2016
Tesla Motors Inc (NASDAQ: TSLA) reported a slight miss in Q1 volumes, but maintained its full-year guidance. Credit Suisse’s Dan Galves maintained an Outperform rating for the company, while raising the price target from $240 to $280.
Tesla reported its Q1 deliveries at 14,820, short of its 16,000 guidance. The company sold 12,420 Model S and 2,400 Model X vehicles. Tesla indicated that the shortfall had resulted mainly from significant Model X component shortages in January and February, which had lasted longer than expected.
Although there was a substantial pickup in production in March, it was too late to meet the guidance. This, however, gave management confidence to reiterate its full-year guidance of 80k-90k units, Galves said.
Pressure To Ease
Galves mentioned the main points of the press release as:
- Model X production reached 750 per week by the end of the quarter. Tesla’s press release indicates that the company should be able to meet the target of exiting Q2 at a rate of 1,000 per week.
- Vehicle orders significantly exceeded deliveries in Q1. “Between that and remaining Model X pre-launch backlog still to be filled, we should see a substantial uptick in deliveries during Q2,” the analyst wrote. The Q2 estimate has been raised from 18k to 19.5k, while the FY16 estimate remains unchanged at 82k.
“Model X production is on-plan, everything is in place for that to happen. We expect some evidence of improvement in Q2, but much more meaningfully in the back-half as overall production increases and Model X inefficiencies diminish,” the Credit Suisse report noted.
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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