Bernstein: 'Uncertainties Loom Ahead' For Tesla Following Q1 Delivery Report

On Tuesday, Tesla Inc TSLA confidently outlined its 2018 objectives and its ability to achieve them without debt or equity raises.

But Bernstein sees too many uncertainties to be convinced.

The Rating

Analyst Toni Sacconaghi Jr. maintained a Market-Perform rating on Tesla with a $265 price target.

The Thesis

While Tesla said the Model 3's quality is the "highest of any product," Sacconaghi Jr. said — but he considers the vehicle’s quality a key variable in the thesis.

“We caution that visibility will remain poor for months to come,” the analyst said in a Wednesday note. 

It’s equally poor for production potential. Tesla's optimism in achieving 5,000 Model 3s per week in about three months is not a guarantee of success, Sacconaghi said. 

“We’ve heard this story before,” Sacconaghi said. “ ... Tesla's production run-rates haven't scaled linearly thus far (production appears to have been mired around 800 per week until the end of March), and IR clarified that further factory shutdowns were expected throughout Q2.”

At the same time, Bernstein considers margin and capital expenditure outlook unclear, and Tesla’s history of raising capital after saying it wouldn’t need to justifies skepticism toward the company's latest assertion.

Price Action

Tesla shares initially popped on the company’s first-quarter report. The stock was up about 2.5 percent at the time of publication Wednesday.

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Photo by Brett Hershman.