Tesla (NASDAQ:TSLA) seems to have run into a roadblock today. Currently, TSLA stock is down by about 1% on news that Deutsche Bank cut its third-quarter delivery estimate to 440,000 vehicles from 455,000 vehicles, representing a 6% reduction. According to analyst Emmanuel Rosner, the lower estimate is due to “global plant downtime” attributable to upgrades and Project Highland, which is a revamp of the Model 3.
The analyst also believes that Tesla runs the risk of reporting earnings below expectations next year due to lower deliveries. For 2024, Deutsche has forecast roughly 2.1 million deliveries, which is below the analyst consensus estimate of about 2.3 million deliveries.
“On the bright side, with the company not trying to push as much volume, there could potentially be less pricing pressure next year,” said Rosner.
TSLA Stock: Deutsche Cuts Q3 Delivery Estimate
According to Investor’s Business Daily, Tesla will likely release its third-quarter delivery figure on Oct. 2. As of now, the analyst consensus estimate sits at 462,000 vehicles, compared to second-quarter deliveries of 466,140 vehicles, which set a quarterly delivery record.
With a lower third-quarter delivery estimate, Deutsche also cut its revenue and earnings outlook. The investment bank now expects $23.3 billion of revenue and EPS of 71 cents, down by about $800 million and down from 87 cents per share, respectively. That’s compared to the consensus estimate of $25 billion in revenue and an EPS of 80 cents. These factors have contributed to Deutsche cutting its TSLA stock price target to $285 from $300.
However, Rosner remains bullish on Tesla’s fourth quarter and long-term prospects:
“For the year, we expect Tesla to reiterate its 1.8m deliveries target, suggesting sequentially improving production run-rate as well as deliveries, likely with better cost efficiencies attached and higher margins in Q4 vs. Q3 […] Together with first Cybertrucks still scheduled to be delivered in Q4, we believe Tesla’s message could be optimistic about next quarter.”
Deutsche isn’t the only firm sounding the alarm on Tesla’s third-quarter deliveries. Earlier this month, New Street Research analyst Pierre Ferragu estimated that Tesla would deliver 438,000 vehicles during the quarter. Like Rosner, he attributed his estimate to production downtime and forecast for a stronger fourth quarter.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
