Tesla Shares Rise Over 4% on Stronger-Than-Anticipated Q1 Deliveries

California-based electric vehicle and clean energy company Tesla reported better-than-expected production and deliveries in the first quarter of this year, largely driven by solid demand for the Model Y in China in mid-January, sending its shares up over 4% on Monday.

In the first quarter, the high-performance electric vehicles manufacturer produced just over 180,000 vehicles and delivered nearly 185,000 vehicles despite the ongoing semiconductor shortage in the auto industry. That was higher than the market expectations of 177,822 vehicles.

Following this, Tesla shares, which surged over 740% in 2020, closed 4.42% higher at $691.05 on Monday.

Analyst Comments

“Tesla 1Q deliveries (184,700) were 7% above consensus and 20% above MS. While we would prepare for 2Q volumes to fall modestly on a sequential basis (chip shortage), the magnitude of the 1Q beat is supportive to FY consensus expectations which stand at 842k units (MS at 785k units),” noted Adam Jonas, equity analyst at Morgan Stanley.

“Tesla’s strategy appears to prioritize volume and capacity expansion (more to come here) while vertically integrating on the battery cell side to ‘control its own destiny.’ We conservatively forecast Tesla’s EV volume growth to lag the overall market over the next decade. We forecast the company to expand to 10 vehicle assembly factories by 2030 supporting volume in the 5mm to 6mm unit range by that year.”

Tesla Stock Price Forecast

Twenty-seven analysts who offered stock ratings for Tesla in the last three months forecast the average price in 12 months of $681.48 with a high forecast of $1,200.00 and a low forecast of $135.00.

The average price target represents a -1.38% decrease from the last price of $691.05. Of those 27 analysts, ten rated “Buy”, ten rated “Hold” while seven rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $880 with a high of $1,272 under a bull scenario and $450 under the worst-case scenario. The firm gave an “Overweight” rating on the electric vehicle producer’s stock.

“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue,” Morgan Stanley’s Jonas added.

“Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~19% by 2030 and ~36% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc. Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcsts, at $880 Tesla trades at approx 27x EV/EBITDA in 2025 and 6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”

Several other analysts have also updated their stock outlook. JP Morgan raised the stock price forecast to $155 from $135. Cowen and Company lifted the price target to $573 from $545. Wedbush upped the raises price objective to $1000 from $950. Jefferies lowered their target price to $700 from $775.

Check out FX Empire’s earnings calendar