Tesla ‘s momentum from the first half appears to be carrying over into the latter part of 2023, at least for now. The electric vehicle maker reported Sunday 466,100 delivered units while analysts polled by FactSet had forecasted 445,000 for the second quarter ending in June. The company doesn’t report traditional sales the way legacy car maker would, and instead prefers to use the term “deliveries” as its preferred gauge. Tesla shares rose more than 6% in the premarket, giving Nasdaq-100 futures a boost . That gain would add to the stock’s already massive 112% rally for the year. Analysts largely lauded the uptick in deliveries, though some cautioning more demand creation was needed. Tesla pivoted its strategy to focus more on mass vehicle production as opposed to fostering margin growth, a decision that weighed on Tesla stock after first quarter earnings . Goldman Sachs took the higher vehicle deliveries as a bullish signal. TSLA YTD mountain Tesla shares YTD “Tesla has been in the process of transitioning to a more even delivery schedule throughout the quarter in order to ease logistics and operational constraints, but the report suggests that Tesla was able to close the quarter more strongly than we and consensus had expected,” analyst Mark Delaney said. To be sure, the bank maintained its neutral rating on Tesla. Its $275 price target implies upside of only $275 per share. Canaccord Genuity was also optimistic on the news, with analyst George Gianarikas nothing that Tesla is also an “attractive relative to a group of tech peers” which includes Meta Platforms. “Our work suggests that Tesla continues to gain market share globally relative to the auto market generally and EV market specifically. EV sales data remains tepid,” Gianarikas said on Sunday. Canaccord’s $293 price target implies about 12% upside for Tesla shares. Others weren’t as sanguine after the deliveries data release, however. “The growing spread between production and deliveries (now ~88k last 4 quarters with est. inventory-to-sales up slightly QoQ) will likely maintain focus on the potential for further pricing pressure in Q3,” Citi analyst Itay Michaeli said in a Sunday note. “Overall, we expect the shares to react favorably to the Q2 delivery beat, though the flow-through will likely depend on the Q2 margin outcome given price discounting during the quarter and the est. inventory position into H2.” Citi has a $215 per share price target on Tesla, a which the stock has already surpassed by more than 21%. Bernstein’s Toni Sacconaghi Jr., a longtime bear on the stock with an underperform rating, noted that while Tesla’s deliveries were above both consensus and the firm’s expectations, investors still need to worry about margin growth. “The key question for investors is what might margins be, amid significant price cuts but continued cost improvement?” Sacconaghi said. “We worry that Tesla will have to further lower prices in 2023 and/or 2024 to meet unit expectations. Moreover, we believe that valuation matters in the long term, and the stock is trading above our fair value price of $150/share.” Sacconaghi’s $150 price target implies downside of more than 40% from Friday’s close. — CNBC’s Michael Bloom contributed to this report.
