Tesla Analyst Sees No Stock Sell-Off Even After Slashing Q3 Delivery Estimates, Bear Asks If This Is 'High-School Cheerleading?'

What Happened: Piper Sandler analyst Alexander Potter on Friday cut his third-quarter deliveries estimate for Tesla from 515,000 units to 445,000 units. The 13.6% reduction was entirely due to the downtime in Tesla’s Giga Shanghai and Giga Austin plants, he said.

The analyst noted that the electric vehicle giant shuttered these plants in preparation for launching new products, namely Model 3 refresh and Cybertruck, respectively. Offering rationale for the reduction so late into the quarter, he said, “Deliveries had been surprisingly strong up until recently.” The impact of the shutdowns is manifesting in the weekly data, he added.

“Arguably, intentional plant shutdowns should not be interpreted negatively, so if Q3 results are a ‘miss’, we doubt TSLA will sell off,” Potter said.

Geographically, the analyst’s delivery estimates are as follows:

  • U.S.: 156,000 units for Q3, down 10,000 units Q-0-Q, and over 1.5 million for the full year
  • China: 148,000 units for Q3, down 11,000 units Q-o-Q
  • Europe: 92,000 units

The analyst maintained his full-year estimates for Tesla and the $300 price target. Piper Sandler has an Overweight rating on Tesla shares.

See Also: Everything You Need To Know About Tesla Stock

He said Tesla stock is priced for 11% unit growth for a quarter and yet the analyst [Potter] says stock wouldn’t fall.

“Is this analysis, or “high school cheerleading?’ Johnson asked.

In premarket trading, Tesla stock rallied 1.28% to $249.54, according to Benzinga Pro data.

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