Regardless of what Tesla Inc.’s first-quarter deliveries show when published in the coming days, analysts say the electric-vehicle maker is seeing strong demand.
Numerous analysts see upside to the 432,000-unit consensus forecast for the carmaker’s quarterly deliveries, citing catalysts like price cuts and eased supply constraints. The company is expected to post its first-quarter delivery numbers over the weekend or shortly thereafter.
“[W]e believe a few data points indicate that a beat relative to the consensus of 432K units is more likely than a miss,” CFRA analyst Garrett Nelson wrote Friday as he upgraded Tesla’s stock
to strong buy from buy. One positive signal was Chief Executive Elon Musk’s remark on the latest earnings call that Tesla was seeing orders come in at almost twice the production rate at that point in January.
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Nelson also noted that Tesla’s production outstripped deliveries in each of the past three quarters, meaning the company likely had considerable inventory as it started this year. Additionally, Tesla may have benefited from improved supply conditions and the continued ramp up of its Austin and Berlin facilities, he noted.
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RBC Capital Markets analyst Tom Narayan is above the consensus view with his own forecast of 445,000 units.
“We increased our forecast based on strong sales data during the first two months of the quarter and believe sales accelerated in March,” he wrote in a note to clients earlier this week. “Production and sales data in China seem solid, and weekly domestic sales data in the first few weeks of March is robust which we assume continues.”
He added that European sales “appear to be following normal quarterly delivery trends.”
Piper Sandler’s Alexander Potter added that he was “hopeful” Tesla could clear the 440,000 mark for deliveries, but a number below there wouldn’t necessarily alarm him.
“[A]ny shortfall would likely reflect delivery timing, rather than fundamental weakness of any kind, in our view,” he wrote. “Production rates have continued rising, especially at Giga Berlin, which recently exceeded 5k units/week. If these trends continue, we wouldn’t be surprised if wait times continue falling, perhaps foretelling more price cuts (but the jury’s out, given IRA uncertainty, among other things).”
IRA refers to the Inflation Recovery Act, which contained tax credits for some electric-vehicle purchases.
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Wedbush’s Dan Ives was optimistic that Tesla’s price hikes from earlier in the quarter will manifest positively in the latest numbers.
“Clearly since the Model Y/3 price cuts were implemented early this year demand has been robust during the course of 1Q led by the key China region, which should enable Tesla to at least hit the ~420k bogey for the quarter with possible upside depending on logistics around deliveries this week,” he wrote.
Baird’s Ben Kallo was more cautious in thinking about the most recent quarter, though he’s upbeat about Tesla’s stock over the long run. He worries that Shanghai downtime related to Lunar New Year “led to ~14K fewer vehicles produced than the reported target run rate of ~80K in February and March,” and his forecast is for about 403,000 units.
“Although sentiment (and share price) have improved from Q4, we still like the setup into deliveries and the remainder of the year,” Kallo wrote. “After negative estimate revisions and extreme worries around demand, recent price decreases and anecdotal data on sales seem to have relieved some bearish sentiment. The year is still early, but we continue to like the setup of the stock and believe bias for estimate revisions is to the upside.”
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Deliveries in excess of the December quarter’s 405,000 units would mark a new record for Tesla, though expectations for the March quarter have come down considerably in recent months. Whereas the FactSet consensus now calls for 432,000 deliveries, analysts were expecting 499,000 for the period back in late September.