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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.

Related Link: Buy Tesla On Pullback? Global Equities Says We're At Tail End Of Any Production Issues

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

Nov 2019MaintainsBuy
Oct 2019MaintainsEqual-Weight
Oct 2019DowngradesNeutralSell

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Posted-In: Credit Suisse Dan GalvesAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas


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