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Baird Cuts Tesla (TSLA) EPS On Light Model X Deliveries, Remains Bullish on No Near Term Capital Need

April 29, 2016 10:02 AM EDT
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Price: $173.80 --0%

Rating Summary:
    24 Buy, 26 Hold, 13 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 7 | New: 41
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Baird analyst, Ben Kallo, sees Q1 Tesla Motors (NASDAQ: TSLA) deliveries slowed by the Model X ramp, which likely impacted margins. he cut his Model X margin estimate to (10%) from (5%), and the overall margin to 19.3% versus our previous estimate of 20.1% and consensus of 20.3%. This leads to cash flow break-even/positive to be achieved in Q2 instead of Q1 given the lower-than-expected deliveries.

For Q2, he estimates ~16.5k deliveries given the Model S refresh and continued ramp of Model X production. This makes the year back-half loaded (~52.6k deliveries in 2H:16). However, TSLA should have production of the refreshed Model S and Model X dialed-in after Q2, and the company should be on track to reach its FY:16 delivery target of 80k-90k vehicles.

Model III deposits will help with cash needs and should combat the Bear argument TSLA has a near-term capital need. TSLA raised >$400M through Model III reservations and combined with TSLA’s lines of credit the company should not need to do a capital raise in the near term.

The firm maintained an Outperform rating and price target of $300.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $247.71 yesterday.



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Robert W Baird, Tesla, Ben Kallo