_edited.png)
Nate Johnstonbaugh| nrj6@psu.edu|October 9, 2019
Last week, Tesla (TSLA) reported a record number of deliveries totaling 97,000 vehicles for the third quarter. However, shares of Tesla fell due to the fact that Wall Street’s expectations were set at 99,000. At the beginning of the year, the company set its full year delivery guidance at a total of 360,000 to 400,000. This means that Tesla needs to reach an unprecedented number of 105,000 deliveries in the fourth quarter of 2019 just to reach the low end of their goal.
Within these numbers, Tesla saw a substantial increase in the quantity of Model 3 cars sold compared to the third quarter of 2018. However, deliveries of the Model S and Model X vehicles accounted for 15% of deliveries in 2019 Q3, while last year these models accounted for 33% of their delivery numbers (2018 Q3).
Taking all of this data into consideration, the outlook for Tesla remains relatively positive. The price targets of Tesla ranges from as low as $190 from RBC Capital Markets to a bold target of $356 from Oppenheimer & Co. Inc. FactSet reported an average price target of $267. Share prices currently sit around $240, so this provides some opportunity for investors in the market. Furthermore, Tesla’s share prices reacted well when the news broke of an email from Elon Musk, CEO of Tesla, announcing to his employees that the company “has a shot” of delivering 100,000 vehicles in Q4. This aggressive delivery target could quite possibly be achievable with the newfound ability to reach customers in China, Australia, Taiwan, the U.K., and a few other markets in Eastern Europe.
Going forward, it remains to be seen whether or not Tesla will be able to reach their 4Q goal of 100,000 vehicles. Multiple analysts have reported concern for a slowdown of demand in Tesla vehicles. I believe that Q4 2019 and Q1-Q2 of 2020 will be crucial in determining just how promising the future of Tesla will be. Personally, I think that Tesla’s stock price is undervalued due to all the innovation occurring within their company, so I expect Tesla’s stock price to rise in the near future.
Sources:
Image:
Comments