Tomorrow, when Tesla Inc. reports the number of deliveries, things will be different on Wall Street.
Recently, investors on the buy side have been less optimistic about Tesla’s TSLA 4.93% supply numbers than investors on the sell side. Dan Levy, an economist at Barclays, says that this time, the buy side seems to have a better view of things.
It’s possible that investors have come to expect Tesla to beat their delivery goals for the third quarter. However, Levy said that this could help drive shares higher. Shares have gone up 36% in the last three months, beating the S&P 500’s gain of about 5% over that time. The year-to-date gain is about the same.
Tesla stock has been going up recently, with a nearly 5% run on Monday that’s the best in the S&P 500 as of noon.
He wrote, “We think that a beat could make the stock even stronger going into Robotaxi Day, serving as a reminder that at least for now, concerns about fundamentals have gone away.”
Tesla’s car business still faces a number of problems, such as a drop in sales in Europe caused by the end of some incentives. Levy says that there are also some small but good changes, such as “surprisingly robust” performance in China and a faster-than-expected ramp of the Cybertruck in the U.S.
He’s also interested in how the company feels about rewards. For example, Tesla used incentives to boost sales in previous quarters but not so much this one.
Levy wrote, “We believe incentives have been a key driver of maintaining demand amid a number of macro headwinds and rising consumer interest in [electric vehicles].” “We think Tesla could offer more incentives around the world at the end of the month if they need to. This is because we think [management] is likely very eager to meet or beat consensus estimates on [third-quarter] volumes before Robotaxi Day.”
With a delivery prediction of 470,000 units, Levy is a little ahead of the consensus view, while the FactSet consensus is 461,000 units. He thinks that a number close to his prediction would mean that Tesla’s sales would stay about the same for the whole year. He said that to do that, a record 500,000 deliveries would have to happen in the fourth quarter, but that’s “likely achievable.”
He said that investors seem to be paying more attention to Robotaxi Day and the big ideas of AI and automation than to Tesla’s main business, which is making cars. The Robotaxi Day event is planned for October and will include details about the company’s plans to make taxis that can drive themselves.
