Tesla (NASDAQ:TSLA) Misses Delivery Estimates, ‘Haircut’ Follows

Tesla (NASDAQ:TSLA) Misses Delivery Estimates, ‘Haircut’ Follows


Tesla (NASDAQ:TSLA) had a rough day Thursday, the Bearish pressure came on the heels of much weaker delivery numbers on its EVs in Q-1

There continue to be concerns about how strong the demand is for the company’s M-3 sedan that has been on the market for less than 2 years. Tesla delivered just 63,000 vehicles in Q-1 of Y 2019, far short of estimates, and it was much lower than the 90,966 deliveries reported in Q-4 of Y 2018.

While Tesla has reiterated its forecast of 360,000 to 400,000 vehicle deliveries for 2019, analysts have kept their ratings steady while lowering price targets on Musk and company.

From its Analysts

JPMorgan reiterated his Underperform rating on Tesla and lowered his target to 215 from 230 based on more headwinds from Europe.

CFRA (S&P Global) maintained its Sell rating on Tesla while also lowering its target price to 225 from 250. Analyst Garrett Nelson lowered his EPS targets to 3.50 from 4.15 for Y 2019 and to 7.25 from 7.80 for Y 2020.

Note: With weaker deliveries reported in Q-1 and with the federal electric vehicle tax credit stepping down and being a disincentive for potential buyers, Shayne and I believe that Tesla will be hard pressed to hit the annual Y 2019 guidance.

JMP Securities maintained its Outperform rating on Tesla, but its target price was lowered to 374 from 394.

Wedbush Securities maintained its Outperform rating while cutting its target price to 365 from 390 target.

Merrill Lynch maintained its Underperform rating and 225 price objective noting that production has been slow to materialize and that other challenges have emerged. Tesla’s liquidity will be pressured and may require the future capital raises that CEO Elon Musk has said were not necessary in past months.

Thursday, a further slam on Tesla was seen in junk bonds that the company has outstanding.

Reuters reported that Tesla’s 5.3% senior unsecured notes due in 2025 saw their prices drop 2.26c to 85.10c on the USD on the heels of the deliveries miss. That sent the yield up almost a half-point to 8.37%.

Reuters further showed that the credit default swap was now about 22c on the dollar.

Tesla shares were last seen trading down 8% at 267.78, in a 52-wk trading range of 247.77 – 387.46.

My work has all Key technical indicators showing Very Bearish, and that there is no support for the stock under 258.96, a clear break and then down, down, down.

Have a terrific weekend

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