TSX futures subdued with key U.S. inflation data ahead
Investing.com - HSBC raised its price target on Tesla (NASDAQ:TSLA) to $127.00 from $120.00 while maintaining a Reduce rating, citing expectations for strong third-quarter delivery volumes. Currently trading at $443.82, Tesla commands a significant P/E ratio of 266, making it one of the most highly valued automakers. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.
The investment bank forecasts Tesla will deliver approximately 471,000 vehicles in Q3, representing a 23% quarter-over-quarter increase. This projection stands nine percentage points above visible alpha consensus and seven percentage points higher than company-collated figures, which expect 437,000-441,000 unit deliveries.
HSBC notes that Tesla’s quarterly sales typically show lumpiness with heavy concentration in the final month of each quarter, a pattern already factored into their forecast. The bank also highlights positive growth signals for Tesla’s energy storage systems business, citing recent commentary from China’s Energy Storage Application Branch.
In the United States, HSBC believes the end of electric vehicle tax credits likely pulled forward demand, suggesting the Q3 monthly run-rate of 55,000 units may not be sustainable unless Tesla decides to offset the $7,500 tax credit gap.
The firm points to market-specific factors driving recent volume growth, including favorable tax treatment in Türkiye that boosted sales significantly in Q3, and generous incentives in Spain that stimulated European growth. HSBC cautions that recent amendments to Türkiye’s tax policies may lead to eased volume growth in that market.
In other recent news, Tesla is preparing to report its third-quarter vehicle deliveries, with projections varying among analysts. Benchmark has maintained its Buy rating on Tesla, expecting approximately 442,000 deliveries, while Cantor Fitzgerald forecasts a slight increase to 443,079 deliveries, attributing the growth to the end of the $7,500 EV tax credit. Deutsche Bank has raised its price target for Tesla to $435, anticipating 461,500 deliveries, a significant increase driven by the Model Y L launch in China and U.S. pre-buying before incentive expirations. Meanwhile, Tesla has urged the Trump administration to uphold vehicle emissions standards, emphasizing the health risks posed by greenhouse gas emissions. In the European Union, Tesla’s market presence has faced challenges, with BYD surpassing Tesla in sales for the second consecutive month. BYD’s sales surged by 201.3% year-on-year, while Tesla’s EU sales dropped by 36.6%, reducing its market share. These developments highlight a dynamic period for Tesla as it navigates both market opportunities and challenges.
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