Tesla’s Q3 Delivery Figures Face Downward Revisions Ahead of Announcement

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Tesla’s Q3 Delivery Figures Face Downward Revisions Ahead of Announcement
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Tesla Inc. (NASDAQ: TSLA ) is set to announce its third-quarter delivery figures in a few days, with Wall Street analysts predicting lower numbers than previously expected. The consensus among analysts monitored by FactSet has revised the initial estimate of 473,000 units down by 2.5% to 461,000 units.

New Street Research analyst Pierre Feragu predicts an even lower figure of approximately 438,000 units, citing factory shutdowns as a significant factor causing this shortfall. This would represent a decrease of around 6% from the second quarter's delivery of 466,000 units. However, compared to the third quarter of 2022 when about 344,000 units were delivered, it would still be an increase of approximately 27%.

During the third quarter, Tesla temporarily halted operations to upgrade equipment at its factories, resulting in reduced production levels. Additionally, the launch of an updated Model 3 in China and Europe led to decreased sales of older Model 3 sedans.

Despite these challenges, both institutional and retail investors are reportedly prepared for a potential miss in delivery targets. High retail ownership, which holds over 40% of Tesla's shares, has prompted institutional investors to pay attention to smaller investors' sentiments.

Troy Teslike, an influential retail investor with a delivery estimate of 442,000 units aligns closely with Ferragu's prediction. Ferragu remains optimistic despite the lower estimates and maintains a Buy rating for Tesla stock with a target price of $350. He does not foresee this impacting Tesla's stock positively but maintains that the situation appears stable.

Ferragu's long-term outlook for Tesla is anchored on the company's sales volumes growing by about 50% annually over the next few years. He also expects Tesla to regain its car business gross profit margins to 25%, rebounding from a decline due to recent price cuts.

In premarket trading on Monday, Tesla's stock was down by around 1.7% at $240.79, while S&P 500 and Nasdaq Composite futures both fell by 0.4%. The stock has been underperforming since delivery estimates started falling, with shares dropping by 11% in the past week.

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