Why Wedbush Sees Tesla Reporting 'Beat Across The Board' With Q3 Earnings

Tesla Inc’s TSLA robust third-quarter deliveries — that came despite an ongoing semiconductor shortage and global logistics issues — will help the electric vehicle maker deliver an earnings beat when it reports results on Wednesday after the closing bell, according to Wedbush Securities.

The Tesla Analyst: Wedbush analyst Daniel Ives has maintained an Outperform rating and a price target of $1,000 on the Tesla stock.

The Tesla Thesis: Ives, who has been a long-time Tesla bull, said in a note Wedbush expects the Elon Musk-led electric vehicle maker to report another "beat across the board" and exceed Street estimates of $13.7 billion in revenue and earnings per share of $1.54.

Tesla had earlier this month revealed a record beat on third-quarter deliveries, driven by strength in Model 3/Y sales. 

The electric vehicle maker delivered 241,300 vehicles globally for the quarter ended Sept. 30, while the Street was estimating a number between 221,000 to 230,000 electric vehicles, as per Ives.  Total production in the quarter was 238,000 vehicles which handily beat estimates by 10,000 units.

See Also: Street May Not Expect GM To Be Able To Compete With Tesla In EV World But Wedbush Says Target To Double Revenue By 2030 'Achievable And Beatable'

“We believe the current supply chain issues has taken roughly 40,000 cars off the annual numbers for Tesla and despite this dynamic, we believe Musk & Co. should be near the ~900,000 mark for 2021 with a 1.3 million/1.4 million unit bogey for 2022,” Ives wrote in a note.

China Bouncing Back: After headwinds earlier this year, Tesla is set to bounce back from headwinds in China seen in the past months, Ives said. 

“We believe China demand rebounded in the quarter and is a clear indicator of the step up in EV demand taking place globally with China leading the way.”

Ives estimates China would represent over 40% of Tesla’s global deliveries in 2022 amid faster electric vehicle adoption. In China, Tesla competes with homegrown rivals such as Nio Inc NIO and Xpeng Inc XPEV.

Ives said he expects electric vehicles to hit 10% of global automotive sales by 2025, from 3% now.

Price Action: Tesla shares closed 3.03% higher at $843.03 a share on Friday. 

See Also: Cathie Wood Uses Tesla Q3 Deliveries As Example To Chide Traditional Automakers For Hiding Behind 'Chip Shortage'

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