The third quarter of 2021 is likely to have been another challenging quarter for the automotive value chain, with companies such as Tesla Inc TSLA continuing to be adversely impacted by semiconductor shortage and production downtime, according to BofA Securities.
The Tesla Analyst: John Murphy maintained a Neutral rating for Tesla, while raising the price target from $800 to $900.
The Tesla Thesis: Both production and sales in the automotive industry is likely to have declined sequentially in the third quarter, Murphy said in the note to clients.
On a year-on-year basis, the third quarter “is also lapping a relatively tough comp, which sets the stage for some very tough earnings to be reported across the group,” he added.
“That being said, with IHS having significantly hatcheted its forecasts in the past month and several companies preannouncing weak results and 2021 outlooks, we believe the bar is set fairly low for 3Q:21 reporting season,” the analyst wrote.
He raised Tesla’s earnings estimates for the third quarter and fiscal 2021 from $1.35 per share to $1.60 per share and from $5.15 per share to $5.50 per share, respectively.
TSLA Price Action: Shares of Tesla had declined by 0.11% to $869.18 at the time of publication Tuesday morning.
Photo: Courtesy Tesla Inc.
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