Tesla skeptic Deutsche Bank predicted positive Q1 2020 profits for TSLA (TSLA: NASDAQ) after the EV company reported strong numbers in its latest production and delivery report. Tesla surprised both bulls and bears when its Q1 2020 report was released. Given the global crisis, the entire world seems to be anticipating bleak Q1 2020 numbers. But TSLA appears to have pulled through.
According to Market Watch, Deutsche Bank analyst Emmanuel Rosner was just as surprised as Wall Street analysts when Tesla released its Q1 2020 production and delivery report. He claimed that Tesla’s delivery numbers, in particular, were “robustly ahead” of his predictions before the report’s release.
Tesla had produced a total of 102,672 vehicles and delivered approximately 88,400 of them. Broken down further, Tesla produced 15,390 Models S and X units and delivered 12,200 of them. It also produced 87,282 units of its affordable cars and delivered 76,200 Model 3 and Model Y vehicles during Q1 2020.
Based on Tesla’s Q1 2020 report, the company started Model Y production as soon as the year began in January. The EV company stated that it was “significantly ahead of schedule” with Model Y production. Its early start may have profoundly contributed to TSLA’s stellar Q1 2020 results.
Deutsche Bank’s Emmanuel Rosner expects TSLA to report a first-quarter profit of 5 cents per share. In comparison, Rosner’s previous estimate was a loss of $1.25 per share. The Deutsche Bank analyst raised his estimates for TSLA’s Q1 profit revenue to $5.9 billion. Rosner also increased his gross margin prediction from 21.3% to 22.1%.
Deutsche Bank has been a long-time TSLA skeptic, so Rosner’s recent estimates may surprise hardcore Tesla bulls. Some Tesla investors would advise taking Rosner’s prediction with a grain of salt and be wary of Deutsche Bank’s stance on TSLA, especially once the pandemic is factored into the equation.
There are Tesla analysts—both bulls and bears—who have advised investors to be cautious during this time of global crisis. “With the second half of March seeing a screeching halt in demand across the globe given the current pandemic, the big question for investors going forward is around the demand trajectory for 2Q/rest of the year and cash burn,” said Dan Ives from Wedbush in a Bloomberg report.
Based on Ives’s comment, Tesla and the rest of the auto industry will likely feel the effects of the pandemic much more during Q2 2020. Some countries have already extended lockdown periods up to May, making more than half of the second quarter strongly affected by the pandemic. It appears the trust test of resilience for TSLA bulls is just beginning.
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Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.