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Tesla Inc. could miss third-quarter delivery and production expectations, but there is “meaningful downside risk” to current 2024 projections due to limited volume growth, Deutsche Bank analyst Emmanuel Rosner said.
While Rosner reiterated his buy rating on the electric vehicle giant’s stock, he cut his price target to $285 from $300.
The stock
TSLA,
slipped 0.5% in morning trading toward a one-month low. It had lost 1.2% on Tuesday, after Baird analyst Ben Kallo provided a forecast for Tesla’s third-quarter deliveries that was below Wall Street forecasts.
Tesla is expected to report third-quarter deliveries on Monday, Oct. 2.
On Wednesday, Deutsche Bank’s Rosner lowered the third-quarter deliveries estimate to 440,000 vehicles from 455,000, due to the global plant downtime the company has taken in the summer for upgrades to its Model 3 EVs. The estimate was below the FactSet consensus of 462,000 vehicles.
“But the larger risk we see is downside to expectations for 2024 on both growth and earnings,” Rosner wrote in a note to clients. And that’s because Tesla indicated at Deutsche investor meetings that it’s no longer planning to expand output at its Austin, Texas, and Berlin factories to 10,000 vehicles per week.
As a result, Rosner said he believes Tesla will forecast 2024 deliveries of approximately 2.1 million vehicles, which is well below the current FactSet consensus of 2.3 million vehicles.
There is, however, a bright side.
“[W]ith the company not trying to push as much volume, there could potentially be less pricing pressure next year,” Rosner wrote.
Tesla’s stock has lost 2.9% over the past three months, but has soared 97.2% year to date. In comparison, the Global X Autonomous & Electric Vehicles ETF
DRIV
has advanced 16.4% this year and the S&P 500 index
SPX
has gained 11.4%.
