According to Elon Musk, Tesla (TSLA) Will deliver 500,000 electric cars to its customers at the end of 2020. According to Wall Street, however, Tesla is going to miss that target – and probably a lot more.
Cowsen & Co. predicts that Tesla will miss its mark by more than 30,000 cars, while RBC Capital Projects will reduce the Tesla mark by about 10,000 cars, and JMP Securities thinks 9,000. Wesbush, Needham & Co, and Tiger Securities – all of these investment banks are also publicly predicting that Tesla will fall short of its 500,000-car one-year target, slicker margins.
But the “Tesla Bear” Gordon Johnson at GLJ Research? He thinks Tesla is going to hit his number, and then some.
Johnson credited his research first to making it easier for his fellow analysts to “beat” TSLA by selling sandbags on Ost with forward deliveries, and then in his opinion, explaining Tesla Said will actually beat projections for this quarter – and why it doesn’t matter.
Originally, Johnson’s thinking is this way: The arms-length transaction between Tesla electric cars and its car-buying consumers in Q4 2020 would actually be only about 174,000, Johnson explains. But if Musk gave up such things, he would fall short of 8,000 cars out of his promised 500,000 deliveries for the year – a major disappointment. So to deliver 182,000 deliveries of its need in Q4, to meet its promised 500,000 cars delivered for the year, Musk has a Tesla complement “real world” in conjunction with a fleet of corporate and rental car sales. “There will be sales, to hire car companies. To car dealers, and “related parties.”
With these complementary sales, Johnson estimated that Tesla would easily pass the 182,000-car mark for Q4, perhaps selling as 184,000 Tesla, and thus a “beating estimate” for 500,000 deliveries for the year. .
And yet, in Johnson’s view, “500,000” is not really the right number to focus on – first because it is an artificial target line that will be crossed artificially, but second because 500,000 is already a lowball. the number is. As the analyst reminds, “In 2018 TSLA directed 2020 deliveries for 750K-1mn” cars, and before that, Musk directed “2020 deliveries to 1mn in 2016.” Johnson predicts (and history suggests that he is right about this) that “the lion’s share of media outlets [will nevertheless] Forget TSKA’s 2018 guidance for 2020 delivery of 750K-1mn cars, and praise for the upcoming [500,000+] The delivery has been called a “big win” for the company.
And this brings us to the root of the matter: will 500,000 deliveries in a single year really be a “big win” for Tesla? When you consider that established automaker Ford sells 500,000 cars every 34 days, General Motors sells 500,000 cars in 24 days, and Volkswagen needs just 17 days to sell 500,000 cars, while Tesla is currently the market price. Is more than three times the market capitalization game. Ford, GM, and Volkswagen combined, Johnson, insisted that Tesla’s valuation is severely outmoded.
In short, Johnson rates the stock to “sell” and sets a $ 40 target on the $ 666-denominated stock. This figure is 94% lower than current levels. (To see Johnson’s track record, Click here)
Overall, Wall Street is equally divided between the bull vs. bear battle over this electric car giant. Of the 25 analysts in the last 3 months, 7 are bullish, 11 have been sidelined, and 7 are in a downturn on the TSLA – all adding to a consensus rating. The consensus target price of the stock is $ 457.83, with a potential drop of ~ 31%. (See TSLA Stock Analysis on TSRAKS)
To find good ideas for EV stock trading at attractive valuations, TipRanks ‘Best Stocks to Buy, a newly launched tool that unites all TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are purely selective analysts. Content is to be used for informational purposes only. It is very important to do your own analysis before making any investment.