Wall Street Lowers Expectations as Tesla Delivery Numbers Loom

Analysts Notebook wrote a column · Sep 26, 2023 17:06

$Tesla (TSLA.US)$ is scheduled to report its Q3 deliveries in a few days, and despite Wall Street's estimates of the numbers decreasing, they may not be falling rapidly or significantly enough. Investors should brace themselves for a potential decrease in delivery numbers. Tesla stock edged higher on Monday.

• FactSet

Estimates of Tesla's deliveries typically decline in the weeks leading up to the end of a quarter, usually by a few percentage points compared to initial projections. The consensus view among analysts tracked by FactSet for Tesla's Q3 deliveries is currently at 461,000 units, 2.5% lower than earlier projections of 473,000 units.

• New Street Research

New Street Research's analyst Pierre Feragu expects a further decline to 438,000 units, citing factory shutdowns as a reason for the potential miss. Deliveries of 438,000 cars would be down approximately 6% from Q2 but up approximately 27% from Q3 2022.

The sequential decline results from production pauses at all of Tesla's factories over the course of the quarter," Ferragu wrote, "we anticipate a strong sequential improvement for Tesla in the fourth quarter in both deliveries and gross margin,"

• Barclays

$Barclays (BCS.US)$ predicts that Tesla's Q3 production and delivery numbers will face pressure, with a recovery expected in the final three months of 2023. Analyst Dan Levy expects Q3 deliveries to reach 455,000 units based on an inventory drawdown of 20,000 cars, falling below consensus expectations of 463,000 units and the firm's previous estimate of 483,000. This would be Tesla's first sequential decline in production since the introduction of the Model 3 car in 2017, except for quarters affected by Covid-19 disruptions. Barclays also anticipates a sharp decrease in September deliveries compared to June deliveries, as well as pressure in China and Europe due to the transition to new Model 3 with longer driving range.

Levy observed that some of Tesla's pricing strategies, such as higher discounting on US inventory vehicles and significant price cuts on Model S and Model X cars in the US, as well as on some Model Y cars in China, have helped counterbalance weak demand in the previous quarter. However, he also mentioned that demand continues to be weak.

We believe bulls will be eager to look past the 3Q result in favor of what is shaping up to be better 4Q," Levy said, mentioning higher global Model 3 Highland sales and Cybertruck deliveries in the fourth quarter as potential catalysts for volume recovery.

Source: MarketWatch, Barron's, CNBC, Investor's Business Daily

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Silverstream : $Tesla (TSLA.US)$ If you read the automotive news, in various countries and regions, Europe, the US, Australia, South Korea, Malaysia, Turkey, and even Japan, Tesla is the best-selling EV, and it has all increased dramatically. Last week, the weekly insurance registration data in China was over 8,000, so it was completely empty. This week's insurance registration was 13,500, but it was treated coldly. Looking at Wall Street's analysis, delivery expectations have been lowered over and over again. Is there a problem with anything... It's true that the factory upgrade is dragging down production, but there is a conflict between the automotive news and the Wall Street News

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Zhang wen jing Silverstream : You have summed it up quite well

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