Tesla (TSLA) is expected to release Q1 delivery numbers during the first few days of April. The quarter’s sales figures will give the Street a chance to assess consumers’ demand for the EV pioneer’s offerings after what has proved to be a testing period for the stock in 2021.
Growth/EV players across the board have endured a hard time recently with Tesla being, according to Wedbush's Daniel Ives, the “poster child for this white knuckle sell off over the past few months.”
However, sentiment might be turning again, and Ives expects Tesla to beat expectations when it releases the quarter’s figures. This could help reestablish the stock’s upward curve.
“Despite the chip shortage and some bumps in the road during the quarter, we believe Tesla should exceed the Street's 170k line in the sand for 1Q and help restore some positive momentum back to Tesla and the EV sector,” the 5-star analyst commented.
According to Ives, industry checks indicate that since the start of the year, EV consumer demand patterns have “continued to improve discernibly.” Tesla sales in February and March have been particularly strong in China, says the analyst.
China sales got off to a rocky start in January, but since then, Ives believes Tesla has benefited from “share shifts vs. domestic players” which puts it on course to “handily exceed 800k units for the year.”
The noises emanating from the giant in the east result in some changes to Ives’ Tesla model.
For 1Q21, the analyst raised his Model 3/Y forecast from 132,000 to 160,000 deliveries and nudged the S/X model estimate from 12,000 units to 14,000 units. This brings Ives’ total deliveries estimate up from the prior 145,000 to 174,000 units.
Ives expects the outperformance to continue in Q2, and now anticipates Model 3/Y deliveries to come in at 166,000 compared to the prior 144,000 forecast. Model S/X deliveries are expected to reach roughly 14,000 vs. 13,000 previously. Total unit estimate for the quarter is also raised from 157,000 to 180,000.
There’s also an increase to Ives FY21 total unit annual deliveries which the analyst now puts at 830,000 compared to the prior figure of 774,000 units.
So good news for Tesla, but what does it all mean for investors? All in all, Ives sticks to a Neutral (i.e. Hold) rating for the shares, backed by a $950 price target. Ives might as well have said Buy — because his target implies a 42% potential upside over the coming months. (To watch Ives’ track record, click here)
If we turn to the Street in general, we can see that the stock also has a Hold analyst consensus rating. In the last three months, Tesla has received 9 Buys, 12 Holds and 8 sell ratings. These analysts have an average price target on the stock of $628.29. Given that TSLA is currently trading at $667.93 this suggests downside from the current share price of ~6%. (See Tesla stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.