Tesla (TSLA) Reports More Negatives Than Positives, Reit Sell at Citi

April 25, 2019 6:11 AM EDT
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Price: $589.72 +3.15%

Rating Summary:
    21 Buy, 21 Hold, 11 Sell

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Citi analyst Itay Michaeli reiterated a Sell rating and $238.00 price target on Tesla (NASDAQ: TSLA) after the company reported results including a Q2 delivery guide of 90-100k with April noted as strong. The company also reaffirmed guidance for 2019 deliveries, guided for positive FCF in every quarter including Q2, and projected profitability in Q3.

However, the analyst noted 5 big negatives:

1) Large Q1 miss mainly on lower auto gross margins and weaker services/other

2) Despite guidance for record Q2 deliveries and some positive commentary on Model 3 ASPs, the Q2 guide still calls for a loss. Recall that prior guidance (Feb 2019) suggested that Q2 profitability was likely

3) Quarter-end cash balance of $2.2 billion further reduces cushion, though management appeared
more open to raising capital

4) Q1 capex was very low

5) No incremental update on Model Y order trends. In fact, Q1 working capital & commentary on the call could raise some questions about Model Y orders to-date

The analyst sees "more negatives than positives in Q1 as Tesla swings back to a sizable loss & FCF burn, putting greater emphasis on the need to bolster balance sheet cushion".

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

Shares of Tesla closed at $258.00 yesterday.

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