Keybanc Says Tesla Deliveries Tracking Above Estimates, Raises Model 3 Deliveries Forecast To 30,000

Tesla Inc TSLA’s stock has stood strong in the month leading up to the quarter’s end. One analyst found such strength is performance-backed.

The Rating

KeyBanc Capital Markets analyst Brad Erickson maintained a Sector Weight rating.

The Thesis

KeyBanc’s store checks found Model 3 deliveries tracking about 50 percent higher than projections and achieving “meaningful ramp.”

By Erickson’s latest estimates, Tesla is on pace to deliver 30,000 to 35,000 in the second quarter, and he accordingly raised his forecast from between 20,000 and 25,000 to 30,000.

He additionally increased 2018 deliveries estimates from 98,182 to 118,182 and reiterated expectations for positive Model 3 gross margins in the third quarter.

“While the longer-term debate on TSLA remains more balanced, keeping us Sector Weight, we maintain that evidence supporting the bear case is not likely to emerge in the near term, in our view,” Erickson wrote, referencing softened demand or poor production ramping.

The analyst remains undeterred by anecdotes around safety quality and anticipates consumer perceptions improving.

Price Action

At time of publication, Tesla shares were trading up 2.5 percent at a rate of $340.27.

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