Tesla TSLA Q3 2021 Financial Results Spark Surge in Price Target Hikes from Investment Firms

Eva Fox by Eva Fox October 21, 2021

Tesla TSLA Q3 2021 Financial Results Spark Surge in Price Target Hikes from Investment Firms

Image: EV Wraps

Yesterday Tesla reported its Q3 2021 financial results, significantly exceeding expectations. A number of investment firms have responded quickly to this by raising their price targets.

Q3 2021 was a record quarter in many respects. Tesla achieved its best-ever net income, operating profit, and gross profit. Additionally, the company reached an operating margin of 14.6%, exceeding its medium-term guidance of “operating margin in low-teens.” The manufacturer said that this level of profitability was achieved while their ASP2 decreased by 6% YoY in Q3 due to a continued mix shift towards lower-priced vehicles. Tesla’s operating margin reached an all-time high as the company continues to reduce cost at a higher rate than declines in ASP.


Cash
Operating cash flow less capex (free cash flow) of $1.3B in Q3
Net debt and finance lease repayments of $1.5B in Q3
In total, $164M decrease in cash and cash equivalents in Q3 to $16.1B

Profitability
$2.0B GAAP operating income; 14.6% operating margin in Q3
$1.6B GAAP net income; $2.1B non-GAAP net income (ex-SBC1) in Q3
30.5% GAAP Automotive gross margin (28.8% ex-credits) in Q3

These financial results have triggered a large wave of price target adjustments from investment firms. At the moment, there are nine of them and information about more continues to flow:

  • Canaccord today raised its price target to $1,040 from $940
  • Wells Fargo adjusts its price target to $860 from $660
  • RBC lifts price target to $800 from $755, citing more confidence in the longer-term trajectory
  • Deutsche Bank adjusts price target to $1,000 from $900
  • Mizuno raises price target to $950 from $825
  • Baird lifts price target to $888 from $764
  • Bank of America adjusts price target to $1,000 from $900
  • Wedbush raised price target to $1,100 from $1,000
  • Credit Suisse lifts price target to $830 from $800

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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Eva Fox, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Eva Fox holds zero shares 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.




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