The Tesla share flirts with the buy signal as strong 4th quarter deliveries are seen
Tesla (TSLA) deliveries are expected to increase from year to year as Elon Musk’s automaker reports fourth quarter figures in early January. Tesla shares fell on Tuesday despite rising analyst price targets after flirting with an early entry on Monday.
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The manufacturer of exclusive electric cars could report Q4 deliveries as early as 1 January and as late as 5 January, with Monday 3 January a probable date.
FactSet consensus figures are for 261,400 Model 3 and Y vehicles and 15,500 Model S and X vehicles. That amounts to a total of 276,900 vehicles. In the third quarter, Tesla delivered 241,300 vehicles in the quarter, beating estimates of 232,000.
However, some analysts are more generally positive about fourth-quarter deliveries.
RBC Capital Markets analysts see fourth-quarter deliveries rising 58% year-over-year and 18% quarter-over-quarter to 285,000 units. This will correspond to 913,000 deliveries for the year. RBC analysts see that Model 3 and Y deliveries increase by 69% year-on-year to 273,000 units.
They see that sales of Model S and X cars fall by 34% compared to a year earlier to 12,500 units. But it’s up 35% quarter over quarter as the Model S Plaid, the revamped version of the luxury sedan, increases. Model S and X deliveries were few in the first half of the year, in the middle of weak production after modest model renewals at the beginning of the year.
As of September, two out of three electric vehicles in the United States are a Tesla as a sales boom. Ford (F), General motors (GM) and other car manufacturers have this year encountered a semiconductor shortage, which is just beginning to ebb. Tesla largely managed to avoid the shortage and production stoppages.
In total, RBC sees that Tesla produces 285,000 to 295,000 vehicles during the quarter.
Tesla still in pole position; 2022 main year for EV Giant
Tesla’s sales increase with EV credits stopped
Deliveries may increase even higher than expected for Tesla in the fourth quarter with new electric car credits pending. New EV credits, which will make Tesla and GM eligible again, are part of the Build Back Better plan. It has stopped in the Senate. While the Democrats’ spending bill may still continue in 2022, including EV credits, the current limbo may encourage Americans to take Tesla deliveries before the turn of the year instead of waiting until 2022.
RBC Capital Markets sees that the majority of Tesla vehicles in Q4 were delivered to US customers, with China as a close number two.
Tesla had expected new factories near Austin, Texas and Berlin to start producing Model Y crossovers by the end of the year, but as of December 27, this has not happened. But as these plants open and increase production, Tesla’s capacity will increase significantly. Competitive EV production should also increase, with the US enjoying a truly competitive EV market for the first time. Returning car production would eventually ease Tesla’s extreme pricing power.
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Tesla shares
The shares fell 0.5% to 1,088.47 on the stock market today, after rising to 1,119 just after opening. Wedbush analyst Dan Ives raised his TSLA stock target to 1,400 from 1,100, citing more catalysts in 2022. Argus Research raised the Tesla stock to 1,313 from 1,010.
On Monday, the Tesla stock climbed 2.5% to 1,093.94, and continued to rise from the bottom on December 21 at 886.12. The TSLA share is consolidated with a buy point of 1,202.05 double bottom. But the Tesla stock is testing a trend line. Getting over Monday’s high intraday at 1117 can serve as a trigger, ideally after forming a handle.
Its relative strength line jumped higher after moving sideways and down for several weeks. Tesla’s RS Rating is 97 of the best possible 99, while the EPS Rating is 72. With a perfect Composite Rating of 99, Tesla ranks as No. 1 in IBD’s automaker group. Tesla is a Leaderboard action.
From 21 December, RBC will have a sector valuation of TSLA shares.
Ford shares fell 0.1% after rising 2.7% on Monday, near long-term peaks. GM shares fell 0.6% after Monday’s rise of 0.9%.
Follow Gillian Rich on Twitter for investment news and more.
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