Baird Says Focus on Telsa (TSLA) Production Ramg and LT Goals, Not Q2 Miss

Baird analyst Ben Kallo reiterated an Outperform rating and $338 price target on Tesla Motors (NASDAQ: TSLA), saying while Q2 missed the production ramp and long-term goals are in focus.

Kallo commented, "Q2 revenue was in line with our estimate, but TSLA missed on EPS with higher-than-expected OPEX. Additionally, gross margin missed consensus estimates and was pressured during the quarter with the Model S refresh and X ramp, but automotive gross margin improved sequentially, which was better than we expected. Importantly, TSLA reaffirmed its 2H:16 delivery target of ~50k vehicles, expects margins to ramp in 2H:16 given higher manufacturing efficiency, and the Model 3 remains on track for 2H:17 production."

For Q3, they expect TSLA to deliver ~12k Model S and ~9k Model X vehicles, generating ~$2.07B in revenue, and ~$0.00 in EPS. For 2016, we estimate revenue of ~$8.21B and EPS of ($0.39) vs. our previous estimates of $8.34B/$0.00, respectively.

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 $225.79 yesterday.

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