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Will Tesla Match Q1 Deliveries? This Analyst Crunches the Numbers

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Tesla (TSLA) shares have put together an impressive run in 2020, to say the least. The market has reacted favorably to reports of strong demand for Model 3s in China, a strong Q1 report and a penchant for tech growth stocks. As a result, shares have skyrocketed by a massive 158% since the turn of the year.

Later this week, Tesla will announce 2Q20 delivery and production numbers and Wall Street will be keen to gauge the coronavirus’ impact on operations. Along with shuttered businesses around the world, Tesla’s sole US factory in Fremont, California, was shut down for much of the quarter.

Deutsche Bank analyst Emmanuel Rosner expects Tesla to hit 76,000 deliveries in Q2, of which 60,000 are Model 3s, 8,000 Models S+X and 8,000 Model Ys. Consensus expects Tesla to deliver 67,000 vehicles.

Breaking down Tesla’s main regions, the analyst estimates that in the US, Tesla will notch up 15,000 deliveries, down by 60% year-over-year, and an additional 10,000 in Europe (4,000 in the UK), and close to 30,000 in China, with South Korea and Canada making up the bulk of the rest.

The estimates indicate a drop from the prior quarter. In Q1, Tesla reported delivery of 88,400 vehicles, in what amounted to its best ever performance.

The weaker volumes are on Rosner’s mind when forecasting 2Q results. Rosner said, “We trim our 2Q revenue from $5.03bn to $4.97bn (also reflecting intra-quarter price cuts in the US) and lower auto GM from 13.9% to 13.5% (16.6% ex credit), leading to EPS of -$1.77 vs. prior -$1.66. This compares to consensus $4.8bn and -$1.61. For free cash flow, we expect a burn of about $500m mainly dragged down by A/P, largely unchanged from prior expectations.”

All in all, Rosner keeps a Hold rating on Tesla, yet nudges the price target up from $850 to $900. Therefore, Rosner expects shares to drop by 17% over the coming months. (To watch Rosner’s track record, click here)

Rosner's colleagues are reading from the same manual. Consensus rates Tesla a Hold, based on 7 buys, 9 Holds and 10 Sell ratings. However, sentiment on the Street is rather more bearish as the average price target comes in at $727.65, representing potential downside of 32% from current levels. (See Tesla stock analysis on TipRanks)

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