Goldman Sachs: Tesla Could Hit Model 3 Production Target, But Report Disappointing Delivery Totals

Loading...
Loading...

Whether Tesla Inc TSLA has achieved its second-quarter targets for the Model 3 will be revealed in the coming week —and Goldman Sachs isn’t hopeful.

The Analyst

Analyst David Tamberrino maintained a Sell rating on Tesla with a $195 price target.

The Thesis

Based on VIN registrations, Model 3 production rates are seen to average around 2,200 per week for the second quarter, below both Tesla's guidance and an elevated consensus estimate, Tamberrino said in a Tuesday note. (See the analyst's track record here.)

Goldman Sachs expects 22,000 quarterly deliveries against a consensus forecast of 28,000 cars.

Tesla could strike a dubiously sustainable but psychologically critical 5,000-unit rate at the end of June with the aid of newly added assembly lines, Tamberrino said. The prospects around the target are seen to buoy the stock at its $330 level, although the metric may not be in focus much longer, the analyst said. 

“Investor conversations on the stock have moved past the 5,000-per-week run-rate production target," a figure most investors are giving the company credit for achieving as it enters the third quarter, he said.

Shareholders are now zeroing in on vehicle profit margins and the conversion of Model 3 reservations to higher-priced vehicles, Tamberrino said. 

Given Tesla's quarter-to-date delivery cadence, Goldman Sachs expects a 4-percent year-over-year increase in combined Model S and X deliveries, which would amount to a consensus beat but a guidance miss.

Price Action

At the time of publication, shares were trading down 1.6 percent to $327.64.

Loading...
Loading...

Related Links:

Bernstein: Tesla's Auto, Services Gross Margins Don't Add Up

Musk Raises His Stake In Tesla, Bets Another $25 Million

Photo courtesy of Tesla. 

Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorPrice TargetReiterationTop StoriesAnalyst RatingsGoldman Sachs: David TamberrinoModel 3
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...