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Credit Suisse expects Tesla (NASDAQ: TSLA) deliveries for Q3 2020 to be ~140,000 units. They write that their expectations will require Tesla to deliver around 65,000 cars in September. However, the firm believes it is possible given Tesla's typical late-quarter wave. As a result, the firm is raising its “Blue Sky” price target to $630.
Credit Suisse assumes that Tesla will be able to produce ~135-140k vehicles in the third quarter. "We assume 3Q production ~135-140k. And while the bar has risen on the 3Q delivery release, we believe Tesla may have just enough to clear it."
Having broken down the deliveries for Q3, the firm assumes that the cumulative deliveries for July/August will be ~ 75k. And the forecast for deliveries in September of ~65k is also realistic, given Tesla's history of strong delivery pushes at quarter-end.
"Assuming Jul/Aug of ~75k, our forecast assumes September deliveries of ~65k units, which would represent the highest-ever final month of a quarter for Tesla (prior high of 63k in Dec'19). While aggressive, we believe this is feasible given Tesla's typical quarter-end wave."
The firm writes that gauging the bar on Q3 deliveries has likely drifted higher to ~ 135-140k.
"We'd argue the bar has shifted for Q3 deliveries. A report on Sep. 20 of Elon Musk talking to potential 'record deliveries' in 3Q (the prior record was 112k) with a push to the California market was interpreted by some that deliveries would be soft of consensus. However, expectations have since moved higher. And while the bar has moved higher, we believe Tesla may have enough to clear the bar."
Credit Suisse also writes that even if Tesla misses, they expect the stock to remain elevated (even if temporarily trading off), as investors would ultimately look past the miss, focusing on Tesla's robust growth narrative.
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