Despite Tesla Set to Report a YoY Decline in Q2 Deliveries Next Week, Wall Street Still Boosts Tesla's Target Price to $310
$Tesla (TSLA.US)$'s stock has risen nearly 8% over the past four trading days, pushing the share price to its highest in nearly four months. Tesla is set to announce its Q2 deliveries next week. Despite the market consensus compiled by FactSet predicting a year-over-year decline of 6.5% to 436,000 vehicles, some Wall Street banks still see 50% price upside potential.
Stifel bullish on Tesla's “growth potential” for the coming years
Stifel initiated research coverage of Tesla with a Buy rating and setting a price target of $265, which implies an upside potential of about 34% based on Thursday's closing price.
Stifel noted Tesla's strong positioning to deliver robust growth from 2025 to 2027 and beyond.
"In the near term, the revamped Model 3 and upcoming Model Y refresh should bolster sales, followed by the commencement of its next-generation vehicle (Model 2) production, which will likely garner very strong demand," analysts wrote.
"We also believe TSLA's AI-based Full Self-Driving (FSD) initiative has the potential to generate significant value through sales of FSD, possible licensing agreements, and as a critical driver of longer-term RoboTaxi initiatives."
The brokerage firm also pointed out Tesla's vast global supply chain and internal manufacturing as factors supporting cost advantages and margins.
Morgan Stanley: Tesla 'uniquely positioned' to benefit from grid investment
Morgan Stanley's Adam Jonas maintained their Strong Buy rating on Tesla. The analyst also maintained a $310 price target.
In a recent research note, Jonas highlighted Tesla Energy's unique positioning to benefit from investment in the U.S. electric grid. The analyst emphasized the potential for a multigenerational increase in energy demand, electricity generation, and data center investment, driven by the acceleration of Gen AI. According to Morgan Stanley, Tesla Energy is valued at $36 per Tesla share, or a staggering $130 billion.
However, some analysts have divided sentiment on Tesla
Based on registration data and app downloads, RBC Capital estimates Tesla deliveries of 410,000 in Q2, down 23% from the firm's prior estimate of 533,000 vehicles and 4.3% below consensus.
New Street expects Tesla to deliver 425,000 units in Q2, which the firm notes would be 4% below consensus expectations. The firm says production disruptions in the U.S. and China have abated, but it sees no signs of a material improvement in demand and likely sees no inflection until 2025 when the low-cost Model 3/Y launches.
Moreover, Elon Musk’s six-year streak of selling more electric cars in the US than every other automaker combined may be coming to an end this month, according to Bloomberg.
Stephanie Valdez-Streaty, director of industry insights at Cox Automotive, stated that a glaring gap in the product cycle that’s left the carmaker reliant on just two vehicles for 95% of its sales. Rivals are now flooding the market in segments where Tesla has nothing to offer.
“Tesla just has a lot more competition now,” Valdez-Streaty said. “Elon really moved the industry forward with electrification, but he’s trying to compete against other brands with new models out — and Tesla doesn’t have any new models.”
Source: Yahoo Finance, Investing, Bloomberg
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RDK79 : One reason mainstream media is too lazy and against providing the complete Tesla story / company efforts. It’s not just about selling over 2 million EVs per year, and the new cybertruck which has tens of thousands of orders and increasing production rates.
Tinkering : Bullish. not as interested in the cars as I am the robot taxis and robots. take it for what it's worth. I'm buying till I don't need to anymore <3
Bearbones : hey MSM, how many books did amazon sell QoQ?, and YoY, you going to complain about their books sales? Tesla is more than a car company. it's what they started as, but it has been years since they have moved into energy and robotics, not even considering AI or R&D.
Tinkering Bearbones : does Cramer work for them now?
ZnWC RDK79 : I don't think the media is lazy. Some writers are just biased against Tesla (and EM) and we need to be critical about where we look for info.
1) First I find the headline a bit biased against Tesla. We are discussing Tesla Q2 2024 but the post only comments YoY sales decline. Based on AJ's estimation, Tesla Q2 2024 delivery is 421,000 +8.9% QoQ which is an improvement.
Read here: Tesla Q2 2024 Delivery Preview Show Improvement from First Quarter
2) The post selectively uses an article based on Bloomberg about Tesla losing the US market majority. We should compare Tesla quarterly delivery based on the Global market with other EV makers. The article below reported that Tesla is ranked largest BEV (battery electric vehicles) sales in Q1 2024 beats BYD in terms of sales volume and quarterly change (%):
Tesla 387,000 units -20%
BYD 300,000 units -43%
Read here: Tesla beats BYD BEV sales volume and quarterly change in Q1 2024
102661548 : In addition to the electric vehicle business, Tesla also has other businesses, such as robotics, energy products, and autonomous driving technology. These are all future growth points
bullrider_21 RDK79 : Your mainstream media is providing an accurate picture on Tesla. But your non-mainstream media is overly bullish. Judging from the Q1 and Q2 deliveries, Tesla would be lucky to deliver 1.8 million EVs this year, far short of 2 million. Cybertruck has 2 million orders but only a small percentage is translating to sales. They only delivered a few tens of thousands.