What Tesla Analysts Expect From This Week's Q1 Delivery Report

Electric vehicle manufacturer Tesla Inc TSLA, which was cruising along at a robust clip until the coronavirus pandemic struck, may have hit the brakes in the first quarter, according to analysts.

The Tesla Analysts

Credit Suisse analyst Dan Levy maintained an Underperform rating on Tesla with a $415 price target.

Wedbush analyst Daniel Ives maintained a Neutral and $425 price target. 

‘Quarter-End-Wave' May Not Materialize, Says Credit Suisse 

Credit Suisse was projecting about 94,000 first-quarter deliveries in the period just after Tesla's fourth-quarter print, but the numbers are now likely to come in at 75,000-80,000 units, Credit Suisse's Levy said in a Tuesday note. 

The analyst said he prefers a range of numbers given the uncertainty that prevailed into the end of the quarter.

On a positive note, production numbers could come in at 100,000 units — but Tesla's reliance on a "quarter-end-wave" places the delivery numbers at risk due to the growing pandemic at the end of the quarter, he said. 

Deliveries in the January-February period were soft, likely due to seasonality and EV tax credit roll-off in the U.S. and Netherlands, according to Credit Suisse.

Sales in China in the two months remained steady, although the weekly sales pace of 700 units trailed the target of 3,000 per week pace due to the coronavirus and the Chinese New Year, Levy said. 

"While Tesla noted in its production shutdown release that it was planning to implement touchless deliveries, we nevertheless would expect Tesla volume to see some impact – especially given the heavy weight of sales to California, where a ‘stay at home' order is in place," the analyst said. 

With Model Y deliveries having kicked off in the first quarter, Credit Suisse expect deliveries of only around 1,000 in the quarter.

See also: Argus Downgrades Tesla On Coronavirus Impact, Slashes 2020 Delivery Forecast By 19%

COVID-19 Headwinds Complicate Tesla's Delivery Trajectory, Says Wedbush

Along with other auto manufacturers, Tesla has been seeing demand softness globally over the last month as consumers prioritize food, health and essentials over Model 3 purchases, Wedbush analyst Ives said in a Monday note. 

The shutdown of the Fremont factory, which is likely to last at least for another month and probably longer, further complicates Tesla's delivery trajectory for the coming quarters, the analyst said.

Ives said he believes hitting the 500,000-plus unit delivery threshold for 2020 is a virtual impossibility. The analyst said he sees 400,000-425,000 as a more realistic estimate.

"While cash burn will be heightened in the near term due to this anomalous global situation, we believe the longer-term trends remain very healthy and $20 of annual earnings power down the road is achievable and still remains the target bogey to hit over the coming years for Musk & Co." 

For the first quarter, Ives estimates total deliveries of 82,000, with the break-up being 14,000 Model S and X units, 68,000 Model 3 units and a minimum number of Model Ys.

"If any company can navigate production hurdles and limited capacity, it's Musk and Tesla looking ahead, which the bulls are betting on to navigate this unprecedented pandemic." 

TSLA Price Action

At last check, Tesla shares were adding 5.31% to $528.78.

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Photo courtesy of Tesla.