Why This Analyst Thinks Tesla's June Quarter Deliveries Will Be Better Than Feared

Zinger Key Points
  • Tesla's June quarter deliveries could be in-line or slightly miss estimates.
  • Tesla, though seeing a slight hit in the near term, could bounce big once consumer spending stabilizes.

Tesla, Inc. TSLA chief executive officer Elon Musk created a furor this week by communicating to employees his intent to slash 10% of salaried jobs at the company. He blamed the proposed action on the economy.

Tesla analyst and Loup Funds co-founder Gene Munster offered his take on the development.

Tesla Not Immune to Recession: Musk's comments about job cuts suggests a recession would have a "small negative" effect on Tesla, Munster said. The analyst noted that there are already signs of a dip in the broader U.S. auto market.

Honda Motor Company's HMC U.S. sales were down 36% in May, steeper than the 15% drop in the March quarter and the 20% fall in the December quarter, he said.

Tesla Could Be Least Impacted: Munster expects a negative impact on Tesla in June. "It likely won't be as bad as investors are fearing today," he said.

Related Link: Musk's Brash Communication Hits Tesla Shares, Nio And Chinese Peers Weather Lockdowns, GM Pushes Bolt Sales: EV Industry Week Highlights

The analyst noted that the company has outgrown the broader U.S. car market deliveries by more than 70% over the past two years. If this gap is preserved and if traditional automakers see a 35% drop for the June quarter, Tesla will likely see a growth rate of 35%, the analyst said.

This would mean that Tesla's performance in the quarter will be "in-line" to "slight miss" from expectations for about 40% growth, he added.

"Big picture, Tesla has the right price and feature combo consumers want," Munster said.

"While being impacted in the near-term, their deliveries should bounce back once the consumer stabilizes."

Tesla closed Friday's session down 9.22% at $703.55, according to Benzinga Pro.

Posted In: electric vehiclesGene MunsterLoup FundsAnalyst ColorNewsAnalyst Ratings