Credit: REUTERS/Matthew Childs

Jefferies analyst expects Tesla to deliver 257k units in Q2, lowers price target

Written by Cláudio Afonso | | LinkedIn | Twitter

Jefferies analyst Philippe Houchois lowered on Thursday the firm’s price target on Tesla shares to $1,050 (from $1,250) while maintaining a Buy rating. The analyst expects the U.S. manufacturer to deliver 257k vehicles in the second quarter and a total of 1.415 million in 2022, a 52% annual growth.

“As visibility on China production starts to improve, we update FY estimates and take a prelim Q2 view. We cut full-year volume 85k units, -5% to 1,415k (52% annual unit growth) mostly on c.30 day production loss, progressive return to work by June end and slow start in Austin. Our estimates factor Q4 Shanghai running at annualized 950k, with modest FY outputs of 50/75k units in Austin/Berlin,” the analyst commented.

“We last published estimates before Q1 results and, after adjusting for higher ASPs, better opex leverage and lost volume, we cut revenue and gross auto profit 5% to $84.8/22.5bn with gross auto margin 28.5%, EBIT $13bn (15.1% margin). For Q2 we forecast units 257k, revenue $16bn, auto gross margin 26% (-400bps from Q1) on weaker cost absorption (D&A) and production mix given higher contribution in Shanghai. This yields Q2 EBIT $1.86bn, 11.6% margin incl est $300m writedown on Bitcoin,” he added.

“”Enemy inside” and “Tesla bigger than Musk” is how we have for years framed the risks from Tesla’s unconventional leadership and weak governance. It is hard to isolate factors behind the recent correction, from Nasdaq, to Twitter financial commitments and China lockdowns, but we are clearly witnessing an uncomfortable pile up of negative news from ratings to polarizing political opinions and ethical questions. His personality suggests resolution depends on him alone. The “low-filter” communication style can be unsettling although we find it usually helpful as Mr Musk freely shares what is on his mind and implications for Tesla, from raw material shortages to manufacturing challenges or future automation. We also note that the loss of key executives from CFO Ahuja to JB Straubel and head of manufacturing Guillen did not stop Tesla going from strength to strength,” Houchois concluded.

According to Shanghai Securities Journal, Tesla is now hiring a large number of personnel for its R&D and Innovation Center department located in Lingang, Shanghai. Based on what relevant Tesla sources told, Tesla Shanghai R&D and Innovation Center will also carry out more original development work around vehicles, charging equipment and energy products in the future.

Written by Cláudio Afonso | | LinkedIn | Twitter