Tesla Tops Q2 Delivery Expectations, But Analysts Say Near-Term Direction Of Stock Hinges On Data Due Later This Month

Tesla Inc TSLA shares are accelerating higher Monday morning on the heels of strong second-quarter delivery numbers. Analysts are turning incrementally more positive, but deliveries are just one piece of the puzzle.

What Happened: Tesla produced 479,700 vehicles in the second quarter and delivered 466,140 vehicles consisting of 446,915 Model 3 and Model Y vehicles and 19,225 Model S and Model X vehicles. Tesla's quarterly delivery numbers were up more than 83% year-over-year. 

Why It Matters: Goldman Sachs analyst Mark Delaney maintained a Neutral rating on Tesla and increased the 12-month price target from $248 to $275. The price target increase comes just a week after the analyst downgraded the stock from Buy to Neutral and raised its price target from $185 to $248.

"The [delivery] report suggests that Tesla was able to close the quarter more strongly than we and consensus had expected," Delaney said in a new note to clients. 

Although Tesla turned in strong delivery numbers for the quarter, the analyst still needs to get a look at margin and profitability data in order to understand the whole story. Tesla announced that it will report second-quarter financial results after the market close on July 19. 

"We expect investor focus heading into the 2Q23 EPS call to be on automotive non-GAAP gross margins, and if Tesla will need to make additional price reductions to grow volumes (and if so the margin implication)," Delaney said. 

The Goldman Sachs analyst believes Tesla could cut back on additional pricing reductions, which would be positive for gross margins. As a result, Delaney raised EPS estimates, as well as its price target, but maintained a Neutral rating on the stock.

See Also: Tesla Analyst Gary Black Flags Key Concern Amid Q2 Delivery Cheer: 'I Would Much Prefer...'

Oppenheimer analyst Colin Rusch echoed much of the same sentiment in an abbreviated note to clients on Monday. 

"We note especially strong Model S/X deliveries vs. consensus may help automotive GM along with higher utilization. We continue to see potential for price reductions to offset those benefits and for GM to be flattish Q/Q," Rusch said. 

Although Oppenheimer continues to believe Tesla is navigating macro crosswinds better than the competition, the analyst's firm remains on the sidelines with a Perform rating on the stock, given concerns about margins remaining lower for longer and the potential implications for valuation.

Tesla will provide analysts and investors with more clarity when it reports quarterly results later this month. Until then, it appears valuation is full in the eyes of analysts, given the stock's massive rally year-to-date.

Read Next: Goldman Sachs Reveals Winning Portfolio: 'Rule of 10' Unlocks S&P 500's Future Top Performers

TSLA Price Action: Tesla shares are up more than 110% since the start of the year. 

The stock was up 7.08% at $280.31 at the time of writing, per Benzinga Pro

Photo: courtesy of Tesla.