Deutsche Bank recommends Tesla shares up to 250
2023.03.28 13:14
Deutsche Bank recommends Tesla shares up to 250
By Kristina Sobol
Budrigannews.com – On Tesla Inc. (NASDAQ:), Deutsche Bank reiterated its Buy rating and $250.00 price target. ahead of the electric vehicle manufacturer’s 1Q23 delivery and production figures, which are anticipated to be reported this weekend.
Due to the continued uncertainty in the macro environment following the price cuts and competitive pricing responses in China, Deutsche Bank lowered their 1Q delivery estimate to 416 thousand units, a decrease of 34% YoY and 3 percent QoQ. They estimate that Tesla shipped about 135 thousand Model 3+Ys to China, with the remaining 168 thousand coming from North America, 73 thousand from Europe, and 25 thousand from Russia.
Overall, Deutsche Bank’s revenue for the first quarter is reduced from $23.3 billion to $22.5 billion due to reduced volume. At the same time, they decreased their gross margin (ex-credit) expectations from -420 bps q/q to -600 bps q/q. This resulted in a quarter gross margin of 18.3%, which was due to some sequential improvement in factory and battery ramp costs and a favorable contribution from the IRA battery production credit. However, recent price reductions in China, the United States, and Europe more than compensated for this.
“1Q is positioned to be the trough for the year,” Deutsche analysts wrote in a note. “While management had indicated that it would still see auto GM (ex-credit, including FSD) remain in the 20%+ range at any single quarter in the year, much of this will depend on the volume/pricing dynamics and macro conditions throughout the year, which in and of themselves are challenging to predict,” they wrote. “1Q is positioned to be the trough for the year.” Our new estimates result in Q1 EPS of $0.69 as opposed to the prior $0.84, which is lower than the current Street revenue estimate of $23.5 billion and the Street EPS forecast of $0.87.”
Analysts anticipate that Tesla’s Mexico facility’s SOP for the next-generation platform could take place in late 2024 or early 2025 after the quarter. They anticipate that the company will debut at least one new model within the platform prior to this, possibly toward the end of the year 2023.
Portions of TSLA are down 1.53% in noontime exchanging on Tuesday.
