Skip to main content

Market Overview

Sell Tesla On Poor Gross Margin Guidance, Berenberg Warns

Share:
Sell Tesla On Poor Gross Margin Guidance, Berenberg Warns

Berenberg’s Adam Hull maintained a Sell rating for Tesla Motors Inc (NASDAQ: TSLA), while reducing the price target from $165 to $150. The EPS estimates for 2016 and 2017 have been reduced from $1.50 to $1.00 and from $3.40 to $2.50, respectively.

The EPS estimates for 2016-2020 have been slashed by 22-33 percent to reflect weaker-than-expected Q4 results and disappointing 2016 gross margin guidance. The gross margin estimate for Tesla has been reduce by about 100bps, reflecting a lower margin forecast for Model X and Model 3.

“We assume lower Model X sales (only partly compensated by higher Model S sales) and slightly lower Model 3 sales, partly because the pace of competitor launches in electric vehicles (EVs) and plug-in hybrids (PHEVs) appears to be increasing,” analyst Adam Hull wrote.

Related Link: It's Tesla Vs. GM In Indiana

Telsa announced its 2016 gross margin guidance for Model X lower than expected. The company indicated that Model X costs were higher than anticipated, which is why Model X gross margins are expected to expand to merely 25 percent by late 2016. Hull expects Model 3 to be a strong product, although margins are likely to disappoint.

The analyst said that there is “much better value” in Daimler AG (OTC: DDAIF) [Rated: Buy, PT at €90] and Volkswagen AG (ADR) (OTC: VLKAY) [Rated: Buy, PT at €160]. He added that Mercedes has a very strong brand, with the new E-class having nearly all of Tesla’s autonomous driving features, while electric cars similar to the Tesla Model S and X would arrive in 2018-2019.

Latest Ratings for TSLA

DateFirmActionFromTo
Apr 2021Canaccord GenuityUpgradesHoldBuy
Apr 2021JP MorganMaintainsUnderweight
Apr 2021WedbushUpgradesNeutralOutperform

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

 

Related Articles (TSLA + VLKAY)

View Comments and Join the Discussion!

Posted-In: Adam HullAnalyst Color Short Ideas Price Target Reiteration Top Stories Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
QSRNorthcoast ResearchInitiates Coverage On
DQGLJ ResearchInitiates Coverage On22.1
TCMaxim GroupDowngrades
GLNGB of A SecuritiesDowngrades
LMNXPiper SandlerDowngrades37.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com