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Investors Expect Substantial Tesla (TSLA) Model 3 Orders in First Three Days - Evercore ISI

March 31, 2016 2:36 PM EDT
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Price: $265.25 -1.1%

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Evercore ISI is commenting on Tesla Motors (Nasdaq: TSLA) today as Model 3 pre-orders commence.

Analyst George Galliers and his team ran a quick investor survey and received 80 responses. The following data was gathered:

When asked, "How many Model 3 orders do you expect Tesla to get in the first 72 hours?"

  • The weighted average was 55.4k units;
  • The mode, with 24.4%, was 21k to 40k units; and
  • The median was 41k to 60k units.

When asked, "How many cumulative Model 3 orders do you expect Tesla to have by year end?"

  • The weighted average was 117.4k units;
  • The mode, with 31.7%, was >160k; and
  • The median was 81k to 120k units.

Galliers' initial reaction is that the results "seem high." He continued, Interestingly, in answer to the first question, 54% of respondents confirmed that they had arrived at their conclusion through “Gut Instinct” as opposed to any logic or math.

Galliers said, To place the cumulative order expectation in context, we note that in its annual report the company disclosed that as of year-end 2015 it had 208 stores, galleries, Service Plus and service facilities. Hence, even assuming that ~50% of orders are on-line and ignoring the fact that some of the 208 facilities are designated for service as opposed to sales, 117.4k cumulative orders by the end of the year computes to almost 300 orders per store globally for a vehicle which does not go on sale until the end of next year.

The analyst believes Tesla racking up 117,400 Model 3 orders by the end of this year would be a "huge achievement." The analyst continued, We are not aware of any auto product, or for that matter any consumer product, which has taken >100k orders with a c$1k down payment; let alone a product that consumers will likely not receive for at least 18 months.

Evercore ISI rates Tesla at Buy with a price target of $310.

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



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