Tesla (TSLA) is expected to report results on its third fiscal quarter on Wednesday, October 21, with a conference call scheduled for 5:30 pm EDT. What to watch for:
1. OUTLOOK: During the last earnings conference call, Tesla said that delivering half a million vehicles in 2020 remains the target. Additionally, the electric carmaker said that it still sees Semi deliveries beginning in 2021. Tesla also sees fiscal year 2020 regulatory credit revenue doubling 2019 total.
2. PRODUCTION, DELIVERIES: Tesla said it produced just over 145,000 vehicles and delivered nearly 140,000 vehicles during the third quarter. The company also announced production of 16,992 and deliveries of 15,200 Model S/X vehicles, and production of 128,044 and deliveries of 124,100 Model 3/Y vehicles.
3. ANOTHER 'STRONG' BOTTOM-LINE PERFORMANCE: On Monday, Wedbush analyst Daniel Ives raised the firm's price target on Tesla to $500 from $475, keeping a Neutral rating on the shares ahead of quarterly results. The analyst believes Tesla's improved manufacturing efficiency and shining Giga 3 success in China will be on full display this week and lead to another "strong" bottom-line performance, which should beat the Street.
In terms of overall unit demand heading into year-end, Ives believes Tesla is on pace to impressively achieve in the area code of 500k units for the year, a line in the sand that was a pipe dream six months ago as Tesla have navigated this unprecedented COVID backdrop. Further, he thinks that with margins incrementally higher on a Model 3 sold in China versus the U.S./Europe this could markedly increase the profitability profile for Tesla over the next few years as ultimately the analyst sees China representing 40%-plus of global sales for the company potentially by early 2022.
Earlier this month, New Street analyst Pierre Ferragu upgraded Tesla to Buy from Neutral with a $578 price target, saying the company's transition to a "fully-fledged profitable premium car manufacturer" is no longer a "controversial" view. Only a ramp of production capacity limits Tesla's growth in at least the next 5 years, Ferragu contended, adding that he anticipates no pressure on prices, leading to expanding margins. The analyst further stated that before 2025, Tesla's addressable market will have quadrupled in volume and its energy storage opportunity will have matured, representing a $750B addressable market.
4. BATTERY DAY: During its Battery Day, Tesla said it is moving toward eliminating cobalt in its batteries, announced a new Plaid powertrain for the Model S that could get to speeds of 200 mph, and a new cathode plant to streamline its battery production. Elon Musk also said Tesla will make a "compelling" $25,000 electric vehicle three years from now. The company is planning to manufacture its own tabless batteries, reducing costs and bringing the sale price of Tesla electric cars closer to gasoline-powered vehicles. Tesla currently sources its batteries from Panasonic (PCRFY) and other partners.
Tesla
+9.51 (+2.25%)
Panasonic
+ (+0.00%)