[ad_1]
Tesla
’s
second-quarter delivery results are expected to arrive in early July. It has been hard to predict the numbers for a couple of reasons: The first is production volatility from Covid-19 lockdowns in China, and the other is Wall Street.
Wedbush analyst Dan Ives believes 250,000 is the “line in the sand” that will drive the stock once delivery numbers are released.
It seems like many analysts are cutting their delivery expectations daily in the waning hours of June. But not every analyst is cutting numbers, which is resulting in a consensus figure that’s difficult to trust.
At least three analysts have cut numbers this week. Late on Tuesday, Citigroup analyst Itay Michaeli cut his second-quarter delivery estimate for
Tesla
(ticker: TSLA) to 258,500 cars. (His prior estimate wasn’t included in his report).
That move followed one also on Tuesday from
Deutsche Bank
analyst Emmanuel Rosner and a Monday reduction from
Mizuho
analyst Vijay Rakesh. Rosner lowered his second-quarter delivery forecast to 245,000 vehicles from 310,000, while Rakesh slashed his estimate to 232,000 from 296,000.
All those lowered forecasts follow similar moves by
Morgan Stanley
analyst Adam Jonas and
Credit Suisse
analyst Dan Levy last week.
Ives cut his delivery expectations from about 300,000 to about 270,000 back in mid-May. He might have been early and wrote Thursday that 250,000 was the level to watch. Above that and investors will be happy. Below that and results will qualify as a disappointment.
The size and frequency of estimate cuts shouldn’t be surprising. Tesla (ticker: TSLA), along with the rest of the Chinese auto industry, has been operating at reduced production rates since late March, battling parts shortages for weeks as local officials tried to contain the rising number of Covid-19 infections.
Tesla delivered a record of about 310,000 vehicles in the first quarter of 2022, marking eight consecutive quarters of record deliveries for the company. At the start of the second quarter, Wall Street believed another record was coming. Estimates for the period started out at about 350,000 units, but that was before China’s Covid-19 problems.
The consensus is now down to about 265,000 units, according to
FactSet
,
while the consensus compiled by Bloomberg is still at about 280,000 units. But some estimates remain as high as 344,000 cars, and those elevated numbers look stale.
The newer estimates, like Rosner’s, are falling in the 240,000 to 250,000 range. That might be comprised of about 130,000 vehicles from Tesla’s Fremont, Calif., plant, about 90,000 from the China facility, and a handful from Tesla’s new plants in Texas and Germany. The German plant was opened officially late in the first quarter. The Austin, Texas, facility opened in early April.
Tesla’s Shanghai plant delivered roughly 182,000 vehicles in the first quarter of 2022.
Whether or not a report close to 250,000 units is good news for the stock is anyone’s guess. As always, there is a lot going on with Tesla stock, and the delivery estimates are just one thing on investors’ minds.
Tesla shares have been affected by inflation and rising interest rates, as well as CEO Elon Musk’s bid for
Twitter
(TWTR). Tesla stock is down about 39% since Musk’s initial stake in the social media company was disclosed, worse than the 23% drop for the
Nasdaq Composite
over the same span.
Tesla stock is more volatile than the market, but that
Twitter
span includes Tesla’s release of blowout first-quarter numbers. The company reported $3.22 in per-share earnings, roughly $1 more than Wall Street was projecting.
Tesla shares rose more than 3% following the earnings report. Since that point, however, it is down about 32%, more than double the 15% comparable drop of the Nasdaq.
Strong deliveries tend to mean good things for Tesla stock. Shares have outperformed the market from the time deliveries are reported until quarterly results are released in seven of the past 10 quarters that Tesla beat analyst expectations.
For the first quarter of 2022, Tesla met expectations, but that wasn’t good enough. The stock fell about 10% between the delivery report and earnings. The
S&P 500
dropped about 2% over the same span.
Coming into the delivery results this time, Tesla stock is down about 36% for the quarter and about 35% this year. Maybe the drop means any bad news is already reflected in Tesla stock, but with Tesla shares it’s never easy to tell.
Corrections & Amplifications: Citigroup analyst Itay Michaeli lowered his forecast for Tesla’s deliveries on Tuesday evening. An earlier version of this article incorrectly said he changed his call on Wednesday.
Write to Al Root at [email protected]
[ad_2]
Source link
