TSX gains after CPI shows US inflation rose 3%
Investing.com -- Tesla is set to post robust third-quarter results, according to Wolfe Research, which said deliveries are likely to beat expectations.
“Q3 is poised to be a strong quarter,” Wolfe wrote, pointing to stronger-than-expected demand in both the U.S. and China.
The firm estimates deliveries of 465,000 to 470,000 vehicles, up 22 percent quarter on quarter and 1 percent year on year, “well ahead of Consensus / WRe of 445k.”
Part of the upside stems from U.S. buyers rushing to take advantage of the expiring $7,500 electric vehicle tax credit, while China also contributed.
“We estimate 165-170k deliveries in Q3, or ~10k above our prior est,” Wolfe said, adding that volumes “largely do not reflect the recent launch of the Model Y L.”
With stronger volumes, global pricing trends, and contributions from Tesla’s energy business, Wolfe sees third-quarter earnings per share in the range of $0.55 to $0.60, compared with the consensus of $0.49.
The firm expects auto gross margins, excluding credits, of about 16.5 to 17.0 percent.
Looking ahead, Wolfe cautioned that “Q4 will be more challenging,” with a step-down in revenue and earnings as U.S. demand is pulled forward by tax incentives.
It has factored in a 30,000 unit quarter-on-quarter headwind.
Still, Wolfe pointed to several offsets: “seasonally stronger demand in Q4, especially in China & Europe,” new model launches including the Model Y L and Tesla’s upcoming affordable lineup, rising energy storage deployments, and progress in autonomy.
The firm noted Tesla is “poised to enter several new US markets (including AZ, NV, and FL), increase their Austin fleet size, and roll-out FSD v14.”