Tesla (NASDAQ:TSLA) bears found themselves nursing their wounds on Monday’s trading session as the company’s shares soared 7% in response to the EV pioneer’s surpassing of Wall Street’s projections with its impressive Q2 delivery figures.
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Total deliveries reached 466,000 compared to the Street’s 447,000 forecast, amounting to an 83% year-over-year increase and more than a 10% sequential growth. Of that haul, Model 3/Y deliveries reached 446,900 (Street expected 429,800) with Model S/Xs coming at 19,200 vs. consensus at 16,000. Notably, the total production for the quarter reached an impressive figure of 479,700 units.
Wedbush analyst Daniel Ives attributes this success to Tesla’s enhanced production capabilities and sees it as a positive indicator for the overall macro environment.
The strong performance can also be attributed to a series of price cuts enacted earlier this year, taken in order to spur demand, a tactic that has obviously worked wonders. “Overall,” the 5-star analyst went on to say, “we believe Tesla is still on track to hit its 1.8-million-unit delivery bogey for the year with this performance and should be able to do it with a margin story that troughs over the next 1-2 quarters and ramps back up into FY24.”
The last point is important as all eyes now turn to the Q2 print where a clearer picture regarding the overall health of the business will emerge. While the price cuts have done the job of stimulating demand, it remains to be seen what impact they have on Tesla’s margin profile.
Nevertheless, Ives thinks the delivery numbers will not only “put the bears back into hibernation” but are another feather in the cap for an increasingly diversified ecosystem that includes recently announced supercharger network OEM deals, an energy business, AI driven autonomous path, unrivaled battery solutions, and “increased production scale/scope globally adding to the Tesla golden EV success story.”
Down to business, then, what does it all mean for investors? Ives maintained an Outperform (i.e., Buy) rating to go alongside a $300 price target, suggesting the shares will climb 7% higher from current levels. (To watch Ives’ track record, click here)
The latest surge is only one of many seen this year for TSLA stock, which has notched year-to-date gains of 127%. As such, most think the shares are due a cooling down period. Accordingly, the $219.96 average target implies downside of ~21%. Rating wise, the stock claims a Moderate Buy consensus rating, based on 14 Buys, 12 Holds and 5 Sells. (See Tesla stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
