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Here's what 4 analysts are saying about Tesla after record delivery numbers sent shares climbing
Here's what 4 analysts are saying about Tesla after record delivery numbers sent shares climbing
Carmen ReinickeJan 4, 2020, 01:50 IST
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Tesla reported record fourth quarter 2019 vehicle delivery numbers Friday that brought full-year deliveries above the low end of the company's guidance and topped Wall Street expectations.
Shares of the company surged as much as 5.5% Friday to new intraday highs.
Here's what four analysts had to say about Tesla after the record report.
Tesla reported record fourth quarter and full-year 2019 vehicle delivery numbers on Friday, topping Wall Street estimates and beating the low-end of the company's own guidance.
"We view these results as a clear indication that EV demand remains strong for Tesla and that the company is well positioned for 2020 with continued positive momentum in all business areas," Jed Dorsheimer, an analyst at Canaccord Genuity, wrote in a note Friday.
Even an analyst who doesn't recommend buying Tesla was impressed. Daniel Ives of Wedbush, who has a neutral rating on stock and a price target that implies nearly 14% downside from where shares closed Thursday, called the results "another major feather in the cap for Musk & Co." in a Friday report.
Overall, Wall Street analysts have a consensus price target of $303.86 and 11 "buy" ratings, 10 "hold" ratings, and 15 "sell" ratings on shares of Tesla, according to Bloomberg data.
Here's what four analysts had to say about Tesla after the solid vehicle delivery report Friday.
1. Canaccord Genuity: "Production woes of the past have been rectified"
Price Target: $515
Rating: Buy
"Overall production was roughly 105,000, yet another record for the company, signifying the production woes of the past have been rectified," wrote Jed Dorsheimer of Canaccord Genuity in a note Friday.
He continued: "The company also provided an update on the key Shanghai facility, reporting that over 1,000 salable vehicles had already been produced and indicated a 'greater than 3,000' unit run capability. This is truly a remarkable feat given the facility did not exist less than one year ago."
2. Wedbush: "Another step in the right direction"
Price Target: $370
Rating: Neutral
"This morning's 4Q delivery numbers were another step in the right direction for Fremont and an impressive performance in our opinion. Looking ahead, a major part of the Tesla growth thesis is around China as the flagship Shanghai Giga 3 build out is ahead of schedule and remains the fuel in the engine for the overall China bull thesis, which combined with healthy underlying consumer demand in this key region should be a catalyst in FY20 and beyond," Daniel Ives of Wedbush wrote in a note Friday.
He continued: "If Tesla is able to sustain this level of profitability and demand for the company going forward, especially in Europe and China, then the stock (and bull thesis) will open up a new chapter of growth and multiple expansion in our opinion."
3. CFRA: "Questions remain"
Price Target: $400 (was $320)
Rating: Hold
"We think sales were boosted by customer purchases ahead of its federal EV tax credit expiration. TSLA shares surged in the back half of 2019, as balance sheet-related concerns eased and investors began to look ahead to the China startup and 2020 Model Y debut," Garrett Nelson wrote Friday.
He continued: "Still, we think questions remain about first half 2020 results and gross margin sustainability; we point out that Tesla is already lowering prices in China and faces a flood of EV competition in the U.S., with at least 25 new models debuting this year (with most eligible for the full $7,500 tax credit)."
4. Bernstein: "The key question is gross margins and profitability"
Price Target: $325
Rating: Market-perform
"While Q4 deliveries were strong, we do see risk of a meaningful deceleration in Q1 20 – about 7,000 of the 12,000 sequential increase in Model 3 deliveries came from the Netherlands, which is witnessing a pull-forward due to a EV tax change," Toni Sacconaghi of Bernstein wrote in a note Friday.
He continued: "Per usual, the key question is gross margins and profitability. Our conversations with management suggest the Shanghai Gigafactory may prove a larger-than-expected drag on Q4 gross margins (perhaps 200-500 bps!) as all Chinese-manufactured Model 3s have to be recognized in COGS regardless of whether they have yet been delivered."
