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Tesla Motors, Inc. Message Board

  • germantrader71 germantrader71 Jul 21, 2011 6:16 AM Flag

    Toyota deal not that good? JPM reducing numbers

    It looks like the Toyota deal is not that good. Analysts had it in their numbers and JP Morgan is even cutting 2012 EPS today (below consensus!)

    Deutsche Bank says:

    "Revenue of $100MM over a 2-year period appears relatively low compared to the $69MM development contract; however, given our estimate for revenueper-
    unit in the $15k range, Toyota appears to be taking a cautious view on
    volumes and we'd expect that the program volumes could be expanded
    given sufficient demand. Our model currently incorporates RAV4 supply
    revenue of $145MM for 2H12 - 2014, but we'd note that this only represents
    3% of total company revenue expectations for this time period, so the
    moderate downside is not material to our valuation."

    JP Morgan Says:

    "TSLA announced a “Supply and Services” agreement with Toyota to supply
    Powertrain components for Toyota RAV4 EV, which should generate
    $100MM of cumulative revenues for TSLA beginning mid-2012. The RAV4
    Powertrain component (battery pack, motor, gear box, etc.) supply agreement
    essentially seems to be a follow-up contract of the prior Development Service contract for the vehicle that TSLA secured in October 2010. Incremental revenues from this supply agreement (over and above the $69MM of previously expected Development service revenues by 1Q:2012) appear largely in line with what we had already penciled into our model."

    JP Morgan is also cutting TSLA 2012 EPS from -1,51 USD to -1,77 USD (consensus at -1,45 USD)

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    • All of this stuff was in the models when they talked about the deal last year (upgrades in the fall after $60M deal announced). Most of the models are have all upside scenarios priced in so the only significant catalysts would be new new stuff like a new manufacturer. Even that however, would have to be a massive deal to move the dial relative to what the analysts have modeled for Model S sales (in the billions).

      The way that the Morgan guy did his goofy analysis (15 year DCF with 90% of value beyond 2020) I imagine nothing can move that dial.

      All the analysts models assume on time delivery and 100% production capacity sold out always.All of the analysts models assume no significant marketing spend. Those are big assumptions! It's hard to sell cars.

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