Tesla, Inc. TSLA reported record deliveries for the September quarter, and the shares are reacting with a move to the upside.
The Tesla Analyst: RBC Capital Markets analyst Joseph Spak maintained a Sector Perform rating on Tesla and increased the price target from $745 to $755.
The Tesla Takeaways: The outperformance in third-quarter deliveries was primarily due to the ongoing made-in-China Model 3 and Model Y ramp amid a very difficult supply environment, and a sequential rebound in Model S/X deliveries from depressed levels in the second quarter, Spak said in a note.
Production was an increased focus this quarter, given ongoing shortages in semis and other components, the analyst said. The company produced 237,800 cars in the quarter, up 15% quarter-over-quarter, thanks to ramping Model S/X production, he said.
Spak viewed the 12% sequential increase in Model 3/Y standalone production in the third quarter as a positive. This may have been due to increasing Model Y output in Shanghai, the analyst said.
Related Link: Why Tesla's Q3 Numbers Are 'Eye Popping' and Hard to Poke Holes In
Discounting the updated third-quarter deliveries, RBC raised its third-quarter revenue estimates from $12.7 billion to $14.5 billion, ahead of the consensus estimate of $13.1 billion. The firm estimates credits of $400 million and auto gross margins, excluding credits, of 27.5%.
The firm's adjusted EPS was also hiked from $1.68 to $1.95 compared to the consensus estimate of $1.47.
Looking ahead, Tesla is likely to deliver 262,500 vehicles in the fourth quarter, likely resulting in full-year deliveries of 890,000, the firm said.
TSLA Price Action: Tesla shares were trading at $797.22 for a gain of 2.84% Monday morning.
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