Stocks

Tesla Inc (TSLA) – Charging Up For The Next Phase Of Growth?

tesla inc tsla Banks react to Tesla Inc (TSLA)’s 3Q18 earnings.

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Goldman Sachs – 3Q18 earnings likely a positive near-term catalyst on working capital driven FCF, but still see challenges ahead

Heading into tesla inc tsla 3Q18 earnings Wednesday evening (10/24), we detail key investor questions and recent debate on the stock from our conversations. Overall, most investors we have spoken with believe 3Q18 will be a positive event for shares — with Tesla Inc TSLA showing positive FCF generation (GSe at $690mn vs. company-compiled consensus of $218mn) and the potential for positive adjusted EPS (GSe at $0.05 vs. consensus of $0.03). And while we believe 3Q18 results have the opportunity to be another solid quarter (similar to 1Q18 and 2Q18 where results were generally better than consensus expectations), our views on the demand profile and the company’s gross margins have not changed.

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Q3 hedge fund letters, conference, scoops etc

Ahead of earnings, we lower our estimates (mostly gross margin driven) for a multitude of factors —but still expect strong tesla inc tsla FCF generation. However, we believe this is mostly working capital driven; and with the company’s growth targets, capital requirements, an expected slow improvement in gross margin trajectory, and our views on sustainability of demand (particularly when incentives dissipate) we still see downside risk to longer-term FactSet consensus estimates. Our 12-month price target becomes $200.

JMP Securities - We initiate coverage of Tesla Inc with a Market Outperform rating and $350 price target.

We believe the expertise Tesla Inc TSLA has accumulated in key aspects of electric vehicle development and manufacturing is very difficult to duplicate. Tesla is a rapidly growing company, with a still-shaky balance sheet, and a brilliant but often-volatile leader, and we have done our best to incorporate the resulting risk into our valuation. Even so, discounting 2020 target multiples of 2.5x revenue and 15x EV/EBITDA back to the present at 10% supports our positive stance and target.

Morgan Stanley - Why Would Tesla Pull Forward Its Earnings Release?

tesla inc tsla surprise pull-forward of 3Q earnings to tomorrow evening is, in our view, more likely a positive sign than an adverse sign. It coincides with an inflection of Model 3 deliveries and could be a catalyst for a positive 4Q guide.