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'Flat' Q2 Report Could Drive Tesla (TSLA) Higher; Gigafactory, Int'l Deliveries in Focus - Stifel

July 31, 2014 11:11 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: 39
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Stifel maintains its Hold rating on Tesla Motors (Nasdaq: TSLA) into the company's Q2 report, which is expected out after markets close Thursday.

Analyst James Albertine sees Tesla posting Q2 EPS of $0.06, which is richer than the consensus at $0.04. The estimate is based on 7,500 deliveries and 25.8 percent automotive gross margin estimate in the quarter.

Key items for Tesla on the quarterly call include its progress on:

(a) its international roll-out (with an emphasis on China deliveries);

(b) an update on the Gigafactory (we hope to learn more regarding Panasonic's partnership, facility location, capacity ramp and potential need for a second factory per TSLA's updated demand outlook); and

(c) details related to TSLA's announced downtime, production/delivery schedule for the Model X utility vehicle.

Albertine commented, As it relates to TSLA shares, our sense is ... that "in line" will be good enough to drive TSLA's stock price higher on EPS results. We also believe TSLA has enough global runway with respect to recently tapped or altogether untapped markets to continue a steady production ramp of Model S and Model X units well into 2015 as the gigafactory breaks ground. That said, we remain Hold rated primarily because we have taken a more conservative view as it relates to the scalability of automotive material, shipping and labor costs (capacity constraints, fluctuations in reservation schedules, potential transportation disruptions associated with the global build out), R&D costs to support ongoing product refreshes, and the underlying base assumption for battery costs on a $/kWh basis, reflecting some of the broader industry skepticism related to TSLA's $200-250/kWh claims.

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

Tesla Motors closed at $228.92 yesterday.



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