BofA Securities Plays Devil's Advocate on Tesla (TSLA) Deliveries, Expects Negative Investor Reaction
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BofA Securities analyst John Murphy reiterated a Neutral rating and $900.00 price target on Tesla (NASDAQ: TSLA) stating that there is little to write home about in the report. The company announced 1Q21 deliveries of 184,800 vehicles, above Street consensus of 173,075, but "only a very modest increase from the record volume quarter for the company at 4Q:20 (180,667)".
The analyst stated "Yes, TSLA’s 1Q:21 deliveries more than doubled YoY (and production increased 76% YoY), which is commendable. However, the growth rate appears much less pronounced when looking on a QoQ basis, up just about 2% from 4Q:20. And while this may have been dragged down by transitory dynamics like the next-generation Model S launch, we believe a burden of proof remains for the company (given its substantial market cap and valuation premium) in demonstrating that it can continue to drive accelerated growth. Interestingly enough, TSLA’s outlook for a more than 50% YoY increase in deliveries in 2021 implies a unit level of 750k+, which is just slightly above the 1Q:21 run rate. Assuming TSLA’s outlook is somewhat correct (if not, potentially conservative) suggests that QoQ increases from this point may be just very modest, which we do not think will be perceived very constructively by the investment community."
Shares of Tesla closed at $710.24 yesterday.
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