Analyst Slashes Tesla Inc (TSLA) Model 3 Production Estimates Ahead Of Delivery Report

Tesla Inc (NASDAQ:TSLA) will soon report much lower than expected Model 3 deliveries as early as this week, according to one prominent Wall Street analyst.

CNBC has more details on the bearish call, which comes at a pivotal time for the electric automaker:

Tesla could announce early this week deliveries of 2,250 Model 3 sedans, Cowen analyst Jeffrey Osborne estimated in a note Tuesday. That would be 75 percent less than Osborne had previously forecast, and well below the 4,000 to 5,000 consensus estimate held by Wall Street that Osborne cited.
The disappointing pace of the Model 3 production ramp-up is likely to distract investors from “healthy” combined delivery numbers on the Model S and X, Osborne said. He estimates 25,250 Model S and X cars were delivered.

Originally, Tesla had forecast it would be producing 5,000 Model 3 sedans each week by the end of 2017. Later, the company pushed that goal back to the end of the first quarter 2018 — although that level is seemingly in jeopardy now as well.

What’s more, Osborne is increasingly concerned about the company’s cash burn rate, and resulting potential for yet another bond offering. “The narrative around high volume manufacturing of the Model 3 and hitting the 25 percent gross margin target will need to be amplified by management in order for investors to digest such a capital raise in our view,” he said. “We also hope for more transparency on what Elon Musk’s overall vision will truly cost as we believe investors are overlooking many aspects of his total vision and [are] myopically focused on the upcoming quarter or two.”

Tesla Inc shares rose $0.86 (+0.27%) in premarket trading Wednesday. Year-to-date, TSLA has gained 2.95%, versus a 0.72% rise in the benchmark S&P 500 index during the same period.

TSLA currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #20 of 24 stocks in the Auto & Vehicle Manufacturers category.

Let's block ads! (Why?)