With the end of the quarter nearing, industry analysts are all looking at Tesla’s Model 3 deliveries and today, Tesla’s stock tumbled in early trading after Goldman Sachs predicted that the automaker will not deliver on its previously announced Model 3 delivery target.
In a note to clients today, Goldman Sachs David Tamberrino wrote about Tesla:
“We believe the company is tracking below its 2018 Model S/X guidance of approx. 100k units (an implied 25,000 per quarter). Further, while monthly Model 3 deliveries are showing sequential improvement, we estimate that they will fall well short of consensus expectations.”
He reiterated a ‘Sell’ rating on Tesla’s stock with a $205 price target – significantly below the current price of around $315 per share.
It would be fair to mention that Tamberrino previously predicted that Tesla’s Model S and Model X demand had peaked last summer before the company ended delivering a record number of those vehicles in the following quarter and reported record new orders.
Tamberrino is one of lowest rated analysts on Wall Street – ranked #4,527 out of 4,783 analysts on TipRanks with a success rate of 48% and an average return of -13.5%.
Here are his recommendations on Tesla’s stock:
I can’t believe that people would give any value to a recommendation by an analyst with such a bad track record, but he works for Goldman Sachs so he can move the market, as evidenced by what we’re seeing today. The same thing happened when he predicted peak Model S/X demand and was proven wrong a few months later.
With this said, I have no doubt that Model S and Model X deliveries will be down after Tesla’s previous record quarter during which they sold out almost all their inventory vehicles.
The quarter was inflated by people rushing in to buy electric vehicles in the US in order to lock in the federal tax credit by the end of the year.
As we previously reported, new Model S and Model X orders are sold out for the first half of the year, which indicates that demand is not an issue for those vehicles at this point.
When it comes to Model 3, Tesla will likely have delivered 4 to 6 times more Model 3 vehicles in the current quarter than during the previous quarter.
But that’s not really what people will be most interested in.
The current production rate, which has been difficult to estimate, will be the most important factor.
Tesla has been guiding 2,500 units per week by the end of the quarter. Like Tamberrino, I have doubts that they are able to achieve it, but who knows?
What do you think? Let us know in the comment section below.