Tesla (TSLA) will be in the spotlight when it reports second-quarter results after the closing bell. As the company announces the quarter’s deliveries in advance, the Street has some idea of what lies in store. Recall, Tesla’s Q2 deliveries underwhelmed as the EV leader felt the impact of China’s zero-Covid policy with the shutdowns affecting the quarter’s haul.
With that aspect known already, looking ahead to the print, Wedbush analyst Daniel Ives thinks investors will be keen to gauge Tesla’s “ability to preserve margins” while the focus will turn to the rest of the year’s outlook.
Here, expectations have been lowered. While at the start of the year, the “bogey” for 2022 deliveries stood in the range between 1.5 million to 1.6 million units, on account of the China headwinds along with the ongoing global supply chain issues, the “whisper bogey” is now nearer to 1.4 million.
With Tesla shares already retreating 30% year-to-date, Ives thinks expectations of a “lower delivery trajectory” for the next couple of quarters have already been “baked into the stock.” That said, given the shaky macro backdrop with CEO Elon Musk also believing the risk of a recession is high, Ives expects plenty of focus on the “demand picture” for Tesla and the EV industry as a whole.
Going by global reservation orders and waiting times, on the Model Y front at least, Ives reckons demand is “still outstripping” supply by ~15%-20%. And further out, Ives thinks Tesla will still be able to meet some lofty targets.
“While the softer macro will clearly impact demand around the edges the coming quarters, we believe Tesla has ample demand capacity to hit ~2 million units in 2023 globally with production capacity that can exceed this number when factoring in Austin and Berlin to a normalized China production target,” the 5-star analyst explained.
All told, Ives maintains an Outperform (i.e., Buy) rating backed by a $1,000 price target. Should the figure be met, investors will be sitting on returns of 38% a year from now. (To watch Ives’ track record, click here)
So, that’s the Wedbush view, what does the rest of the Street have in mind? The analyst consensus rates the stock a Moderate Buy, based on 17 Buys, 8 Holds and 5 Sells. According to the $883.36 average target, shares are expected to climb 22% higher over the one-year timeframe. (See Tesla stock forecast 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.
