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Tesla’s third-quarter delivery expectations have a wider range than normal among analysts.
John Thys/AFP via Getty Images
Investors are about to get one of those data points they eagerly anticipate each quarter.
Tesla
is due to report third-quarter delivery figures on Monday. It’s going to be wild. Estimates are all over the place.
“Estimates have an unusually high standard deviation this quarter,” wrote Canaccord analyst George Gianarikas in a Thursday evening report.
He has a point. Wall Street expects
Tesla
(ticker: TSLA) will deliver about 462,000 vehicles in the third quarter. The range of predictions, however, is from about 440,000 units to 510,000 units, according to FactSet. That 70,000 spread is about twice as large as it was in the second quarter when Tesla delivered about 466,000 units.
Deliveries are expected to fall sequentially due to “the timing of new product introductions, general weakness in the auto market, and comments from Mr. Musk on last quarter’s earnings call,” added the analyst. Management pointed out in the quarterly conference call that Tesla factories were taking planned downtime to upgrade equipment.
Gianarikas isn’t too worried, however. He rates the shares Buy and has a $293 price target for the stock. “Don’t get too hung up on the delivery number, it’s less relevant this quarter,” he advised investors. New products are on the way, such as Cybertruck, deliveries of the upgraded Model 3 start shortly, and the UAW strike could benefit Tesla in the long run by improving its cost structure relative to peers. Tesla doesn’t have a union. “Lots of good stuff is happening at Tesla,” he added.
The rest of Wall Street is a little more nervous. About 41% of analysts covering Tesla stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. A year ago, about 64% of the analysts covering Tesla rated shares Buy.
The average analyst price target for Tesla stock is about $258 a share. A year ago it was about $318.
Investors are a little nervous too. Tesla shares are down about 12% over the past two weeks as third-quarter delivery estimates have gone from just above 470,000 units to just above 460,000 units.
Calling the stock market reaction to any one data point is never easy. Investors and traders have to take into account expectations, recent stock price performance, and, of course, what actually gets reported. The third-quarter delivery reaction for Tesla stock is even harder to figure out than usual.
Tesla stock is up 3% Friday, while the
S&P 500
and
Nasdaq Composite
are up 0.6% and 1.1%, respectively.
Write to Al Root at [email protected]
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