Tesla analysts update views after Q3 deliveries

Tesla stock (TSLA) lost 3.5% on Oct. 2 after the electric vehicle maker reported 0.33-quarter deliveries of 462,890, up about 6% from a year earlier. This marks the primary year-over-year growth in quarterly deliveries for 2024.

Alternatively, the number a bit of missed analysts’ forecast deliveries of 463,310, based on FactSet StreetAccount data. Tesla's year-ago period saw deliveries of 435,059 vehicles with production totaling 430,488.

The company also said it produced 469,796 vehicles and deployed 6.9 GWh of energy storage products at some point of Q3.

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Tesla stock is down Zero.33% year-to-date, largely underperforming the S&P five hundred Index, which is up greater than 20%. Alternatively, the stock has already recovered from the slump earlier this year, which became due to weak sales.

Tesla's Q1 deliveries were harsh, with a total of 386,810 units, an eight.5% year-over-year decline, significantly missing even the foremost pessimistic analyst forecasts. First-quarter production became 433,371 vehicles, down 1.7% when when compared with the previous year.

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The company cut the U.S. prices of its Model Y, Model X, and Model S vehicles by $2,000 each and every in April after first-quarter deliveries to do something about the a growing collection of tough global EV market.

2d-quarter deliveries of 443,956 vehicles were better than analysts’ expectations but still represented a four.eight% yearly decline.

Tesla’s energy business thrives

Tesla will release its Q3 financial results after the market closes on Oct. 23. Within the previous quarter, the company reported earnings of $Zero.Fifty two per share, falling short of analysts' expectations of $Zero.sixty two.

Revenue for the second quarter reached $25.5 billion, a bit of exceeding forecasts, but automotive sales dropped 6.5% to $19.9 billion.

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Tesla’s core automotive segment, which makes up around 78% of its revenue as of Q2, is losing market share to other electric vehicle brands. Cox Automotive data reveals that non-Tesla EV sales in the U.S. increased by 33% in the primary half of 2024, while Tesla sales fell by 9.6%, InsideEVs reported.

Alternatively, the company is prospering in its energy business. Within the second quarter, Tesla’s energy generation and storage segment brought in $3 billion in revenue, doubling the $1.5 billion from the identical period last year. This segment represents approximately 12% of Tesla's revenue as of Q2.

Investment bank William Blair analyst Jed Dorsheimer initiated coverage of Tesla with an outperform rating in September. He notes that the company is building an energy ecosystem it's "Apple-esque" when integrated with its automotive business and future opportunities in areas like synthetic intelligence, robotaxis, and robotics.

"We view Tesla Energy as the foremost underappreciated component to the Tesla story and are awaiting the narrative will shift toward the energy storage business in light of tempered EV expectations in the near term," said Dorsheimer in a note, thefly.com reported.

Analysts' reactions are mixed

Analysts have responded with mixed outlooks following the Q3 delivery report. Ben Kallo from Baird mentioned that deliveries were lower than the firm anticipated but noted that energy storage deployments were robust at 6.9 GWh, representing the second-largest quarterly figure in Tesla’s history.

Baird also expects the Q3 deliveries to be a “look-through event” with attention quickly shifting to the robotaxi event unveiling on Oct. 10. The firm has an outperform rating on the shares with a cost target of $280, based on thefly.com.

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Evercore ISI remains more cautious. The firm’s analyst Chris McNally often often often called the delivery numbers a “slight expectational disappointment” given "recently heightened" buy side forecasts at about 470,000 and the consensus demand 462,000 units.

Evercore ISI expects Tesla’s Q3 EPS to fall between Fifty seven cents and fifty 9 cents, with a gross margin of about 15%. It has an in line rating on Tesla shares.

Barclays also acknowledged the delivery omit, attributing it to weakness in Model S, X and Cybertruck. Barclays keeps an equal weight rating on Tesla with a $220 price target.

Tesla traded at about $249 on Oct. 2.

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