Why This Tesla Analyst Is Shooting For Below-Consensus Q2 Deliveries

Electric vehicle pioneer Tesla, Inc. TSLA is widely expected to report its second-quarter deliveries on Sunday. An analyst at RBC Capital Markets expects quarterly deliveries to come in below the consensus estimate.

The Tesla Analyst: Tom Narayan has an Outperform rating and $305 price target for Tesla stock.

The Tesla Thesis

Q2 Expectation: Tesla's total second-quarter deliveries will likely come in at 438,000 units, Narayan said, citing his checks of regionally reported data and app download data. The estimated number would mark a 72% year-over-year increase and a 4% sequential estimate.

This compares to the company-compiled consensus estimate of 446,823 units. Future Fund's Gary Black said he expects second-quarter deliveries of 450,000 units, compared to FactSet's estimate of 445,000 units. China sales, according to the fund manager, would come in at 150,000 units.

RBC’s Region-Wise Forecast

Geography	Deliveries (in units)
U.S.	168,000
China	158,000
Europe	67,000
Rest of the World	45,000

RBC’s Model-Wise Forecast

Models	Deliveries (in units)
Model 3/Y	423,000
Model S/X	15,000

See Also: Everything You Need To Know About Tesla Stock

Premises Behind The Number

RBC's Narayan noted that total global Tesla app downloads continued to trend higher, which points to an increase in sales. China production and sales are improving, but domestic monthly sales remain choppy, making an accurate prediction difficult, he said.

European sales were following normal quarterly trends and app download data supported robust June deliveries, Narayan said. But the analyst said he remains a bit more cautious regarding the region's performance.

Despite RBC's below-consensus second-quarter forecast, Narayan sees Tesla remaining on track to achieve its 1.8 million-unit sales target for 2023. Demand is picking up following price cuts announced earlier this year, he added.

What's Next: Following the second-quarter deliveries update, market focus will likely turn to the earnings for the quarter, Narayan said. Investors will be closely monitoring several key metrics, including trends in demand, the company’s financial health with an emphasis on operating margin, advancements in Tesla’s full-self driving software, and the status of its recent partnerships with other industry players in the charging network sector.

Tesla Price Action: Tesla stock rose 1.66% to close at $261.77 on Friday, according to Benzinga Pro data. The stock has gained about 114% so far this year.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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