A good entry point for Tesla stock? Not just now, says the analyst
Last Friday, Tesla (TSLA) released first-quarter shipments, which strongly denied forecasts. Wall Street applauded Musk & Co.’s results and duly pushed stocks higher in the next session. Overall, first-quarter shipments reached a record 184,800 vehicles, up 109% year-on-year and well above Street’s forecast of 172,230 vehicles. Model 3 / Y shipments were up 140% year-on-year and a sequential 13% increase to 182,780 shipments, also well above the consensus forecast for 160,230 shipments. The disappointing numbers for the Model S / X, which reached 2020 (down 83% year-on-year), compared to Street’s forecast of 12,060 deliveries, spoil the picture somewhat. Mitigating factors were present, however, as a global chip shortage caused the plunge. While the overall numbers have impressed many on the street, RBC’s Joseph Spack believes they will do little to change the conversation about the electric car pioneer. Better-than-expected, 1Q21 deliveries are likely to be well received, even if the bar was recently lowered due to concerns about the half-impact, Spack said. “But we see nothing that could move the mid-term debate between bulls (whose thesis focuses on higher penetration of BEVs, maintaining a very high TSLA share and the possibility of using software, energy and other) and bears (where the central argument remains the valuation)” … Spack expects supply chain issues to continue in 2021 and has therefore lowered its full year supply forecast from 860,000 to 825,000. Due to lower S / X deliveries, there is also a decrease in the analyst’s revenue estimate for Q1 21 which fell from $ 10.8 billion to $ 10.5 billion (Street has $ 10.1 billion). Spak’s revised 1Q diluted earnings forecast is also lowered from $ 0.97 to $ 0.88, but is still above the consensus of $ 0.83. In the Tesla debate, Spack sits somewhere between bulls and bears, recommending holding the rating. Spak’s $ 725 price target suggests the stock could rise 5% from current levels. (To view Spack’s track record, click here). If you look at the consensus, the rest of Street generally has a similar view. The stock has a Hold consensus rating based on 10 buys and holds each and 7 additional sells. With a target average price of $ 681.48, the stock is expected to remain within the range for the foreseeable future. (See TipRanks Analyzing Tesla Stocks) To find good ideas for trading stocks at attractive valuation, visit TipRanks ‘Best Stocks to Buy,’ a recently launched tool that brings together all TipRanks stock analytics. Disclaimer: The opinions expressed in this article are solely those of the analyst. The content is for informational purposes only. Before making any investment, it is very important to do your own analysis.