Stifel, the leading investment firm, has reaffirmed its Buy rating on Tesla (NASDAQ:TSLA) shares and set a price target of $265. This decision follows a thorough evaluation of Tesla's third-quarter production and delivery numbers, which Stifel believes could have a slight negative impact on the stock.
Tesla reported a total of 462,890 deliveries in the third quarter of 2024, in line with Stifel's projection of 465,169 and the consensus estimate of 463,310. While some market expectations were higher, the delivery count was very close to the forecasts.
Breaking down the deliveries, Tesla's Model 3/Y series exceeded both Stifel's forecast and the consensus with 439,975 units delivered. However, the combined deliveries of other models like the S, X, and Cybertruck fell short of expectations. In the energy storage segment, Tesla's deployment of 6.9 GWh aligned with market predictions.
Stifel's analysis suggests that while the delivery results were as expected, they could be seen as a minor setback for Tesla's stock value in the short term. This is partly due to the anticipation of a modest delivery beat, especially after strong performance numbers from China in August.
Tesla's third-quarter production reached 469,796 vehicles, slightly below Stifel's estimate but marking a significant increase from the previous quarter. The upcoming earnings report on October 23 is expected to shed more light on Tesla's financial health, particularly regarding automotive sales gross profit per delivery, excluding leased vehicles. This detail will help clarify the impact of pricing strategies and potential discounts on the company's margins.
In a related update, Tesla Inc. saw a slight dip in third-quarter vehicle deliveries, totaling 463,000 units, falling short of the market's heightened expectations. Evercore analysts described this as an "expectational disappointment."
Despite the delivery shortfall, Tesla's production figures remained strong at 470,000 units for the same period. Evercore projects third-quarter earnings per share (EPS) for Tesla to be between 57 and 59 cents, with an expected gross margin (GM) of around 15%.
Barclays maintained its Equalweight rating on Tesla shares, attributing the delivery miss to weaker performance in the Model S, Model X, and Cybertruck lines. On the other hand, Wedbush reiterated its Outperform rating on Tesla shares, emphasizing the value of Tesla's advancements in artificial intelligence (AI) and Full Self-Driving (FSD) technology.
Additionally, Tesla recently won a dismissal of a shareholder lawsuit alleging fraud over self-driving technology claims. Despite ongoing labor disputes, Tesla has seen an increase in its market share in Sweden, reaching 8.5% in 2024, up from 7.8% the previous year.
InvestingPro Insights
According to InvestingPro data, Tesla's market capitalization is an impressive $784.54 billion, reflecting its dominant position in the electric vehicle market. With a P/E ratio of 62.62, investors are pricing in high growth expectations, which aligns with Stifel's Buy rating despite the delivery miss.
InvestingPro Tips highlight that Tesla has more cash than debt on its balance sheet and sufficient cash flows to cover interest payments, indicating a strong financial position for future growth initiatives. This financial stability is crucial given the challenges and competition in the EV industry.
However, investors should be aware that Tesla is trading at a high earnings multiple and has a high P/E ratio relative to near-term earnings growth. The upcoming earnings report will be essential in justifying the current stock price.
For a detailed analysis of Tesla's financials and market position, InvestingPro offers 19 additional tips, providing a comprehensive view of the company's strengths and potential risks.
This article was crafted using advanced AI technology and curated by our expert editorial team. For more insights, check out our Terms & Conditions.