On Wednesday, Stifel maintained its Buy rating on Tesla (NASDAQ:TSLA) shares with a price target of $265. The firm's stance comes after evaluating Tesla's third-quarter production and delivery figures, which Stifel views as a slight negative for the stock.
The electric vehicle manufacturer reported a total of 462,890 deliveries in the third quarter of 2024, a number that closely aligns with Stifel's projection of 465,169 and the consensus estimate of 463,310. Despite some market anticipation for higher figures, the delivery count was nearly on target.
The breakdown of deliveries revealed that Tesla's Model 3/Y series slightly surpassed both Stifel's forecast and the consensus with 439,975 units delivered. However, the combined deliveries of Tesla's other models, including the S, X, and Cybertruck, did not meet expectations. In the energy storage segment, Tesla's deployment of 6.9 GWh was deemed to align with market predictions.
Stifel's commentary highlighted that the delivery results, although in line with forecasts, could be considered a small setback for Tesla's stock value in the short term. This sentiment is partly because there were hopes for a modest delivery beat, especially after strong performance numbers from China in August.
Tesla's third-quarter production totalled 469,796 vehicles, which was 8.5% below Stifel's estimate, yet it marked a 14.4% sequential increase from the previous quarter. The firm anticipates that the upcoming earnings report on October 23 will provide further insight into Tesla's financial health, particularly regarding the automotive sales gross profit per delivery, excluding leased vehicles. This detail is expected to clarify the impact of pricing strategies and potential discounts on the company's margins.
In other recent news, Tesla Inc. experienced a slight dip in its third-quarter vehicle deliveries, totaling 463,000 units, falling short of heightened market expectations. Analysts from Evercore highlighted this shortfall as an "expectational disappointment."
Despite this, the company's production figures remained robust at 470,000 units for the same period. Evercore projects third-quarter earnings per share (EPS) for Tesla in the range of 57 to 59 cents, with an expected gross margin (GM) of around 15%.
In addition, Tesla's energy production saw a decrease, generating 6.9 GWh in the third quarter, a drop from 9.4 GWh in the second quarter. Barclays (LON:BARC) maintained its Equalweight rating on Tesla shares, attributing the delivery miss to weaker performance in the Model S, Model X, and Cybertruck lines. Conversely, Wedbush reiterated its Outperform rating on Tesla shares, emphasizing the potential value of Tesla's advancements in artificial intelligence (AI) and Full Self-Driving (FSD) technology.
In other company news, Tesla recently won a dismissal of a shareholder lawsuit alleging fraud over self-driving technology claims. Additionally, 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. These are the recent developments in Tesla's journey.
InvestingPro Insights
To complement Stifel's analysis of Tesla's recent performance, InvestingPro data offers additional context for investors. Tesla's market capitalization stands at an impressive $784.54 billion, reflecting its dominant position in the electric vehicle market. The company's P/E ratio of 62.62 indicates that investors are pricing in high growth expectations, aligning with Stifel's Buy rating despite the slight delivery miss.
InvestingPro Tips highlight that Tesla "holds more cash than debt on its balance sheet" and "cash flows can sufficiently cover interest payments," suggesting a strong financial position that could support future growth initiatives and weather potential market volatility. This financial stability is particularly relevant given the production challenges and competitive pressures in the EV industry.
However, investors should note that Tesla is "trading at a high earnings multiple" and has a "high P/E ratio relative to near-term earnings growth." This valuation premium underscores the importance of the upcoming earnings report in justifying the current stock price.
For those seeking a deeper dive into Tesla's financials and market position, InvestingPro offers 19 additional tips, providing a comprehensive view of the company's strengths and potential risks.
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