Tesla TSLA Gets PT Boost from Deutsche Bank Ahead of Deliveries Report

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Tesla receives a price target increase from Deutsche Bank ahead of its delivery and financial report. Although the PT is up 15%, it is still lower than the current price, which is $256 at the time of writing.

Deutsche Bank reiterated its Buy recommendation for Tesla shares and raised its 12-month target price for the shares to $230 from $200, or up 15%. The move comes ahead of the company's Q2 2023 delivery and earnings report. This shows that the firm expects Tesla to achieve more success than previously anticipated.

Tesla delivery data for Q2 will be released over the weekend. Deutsche Bank revised its estimates for second-quarter deliveries and now expects them to reach 448,000 units. This reflects a 76% YoY increase and a solid 6% QoQ growth. Deutsche Bank estimates that Tesla will deliver about 153,000 Model 3 and Model Y units to China, 168,000 to North America, 87,000 to Europe and 23,000 to the rest of the world.

In addition, Deutsche Bank raised its estimate for Tesla's Q2 revenue to $24 billion (from $23.5 billion). This roughly equals the Street's estimated revenue of $24.3 billion. The firm also raised gross margin estimates from -200bps q/q previously to -140bps q/q, 17.6% for the quarter. According to the note, the revised estimates take into account the price cuts implemented at the beginning of the quarter, as well as the subsequent slight price increase.

Deutsche analysts wrote in a note, “Beyond the quarter, we still see the risk of additional price cuts over the rest of the year and into 2024. At our recent DB Global Autos Conference, Tesla reiterated it would continue to stay nimble with pricing, and while its costs will come down in the remainder of the year, the company indicated the more important question remains whether they will come down at the same pace as price should it need to take further cuts.”

Deutsche Bank raised its Q2 EPS estimate to $0.79 vs. prior $0.73, in line with the current Street EPS forecast $0.79.

© 2023, Eva Fox | Tesmanian. All rights reserved.

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