Tesla Motors Inc Beat Deliveries; What Do Analysts Make Of It?

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Tesla Motors Inc Beat Deliveries; What Do Analysts Make Of It?
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Tesla shares spiked 8% Friday following the company’s announcement of strong vehicles deliveries in the first quarter. The EV manufacturer delivered 10,030 vehicles during the first quarter, above the previous guidance of 9,500. Some analysts praised the performance report, while some were cautious.

More transparency in reporting

Baird analyst Ben Kallo reiterated his Outperform rating to the stock and a price target of $275 following the delivery announcement of over 10,000 vehicles in the first quarter, which outperformed Wall Street’s delivery estimates. Kallo said there are various positive catalysts in the future, making Tesla one of his favorite picks.

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Kallo also applauded the increased transparency in the company, which has improved to a new level. The analyst stated that the company’s efforts to change the way of reporting is as good as the delivery beat. Tesla will now announce its deliveries within three days of the end of each quarter. The Palo Alto-based company has made the right decision, as it will bring down speculations and erroneous reports of demand during the time between the end of the quarter and the quarterly report, says the analyst.

Pacific Crest Securities analyst Brad Erickson also maintained his Outperform rating on the stock, noting, “TSLA shares have weathered undue pessimism recently on account of oil pricing, woes in China, longer-term competitive concerns and skepticism around execution risk.”

Not all praising Tesla

Separately, Deutsche Bank analyst Rod Lache also praised Tesla’s announcement, but he also issued a warning that in the long term, this could not be the potential reason for anyone buying Tesla shares at the current price point. Lache said investors should believe that the company will be much larger in the future if they want to buy its shares.

BofA/Merrill Lynch analysts reiterated their Underperform rating on the stock with a price target of $65. Analyst John Lovallo II said the numbers are a “positive surprise” but are “not that impressive,” as they are only a proof of sequential growth of just 2% from the 9,834 vehicles it delivered in the fourth quarter.

Tesla shares have had a steep fall over the past several months, dropping as much as 20% from their all-time high in September. On Monday, Tesla shares closed up 6.34% at $203.10, while year to date, the stock is down by over 8%.

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