on the crypto
Wall Street has good and bad news for Tesla investors. Analysts expect more deliveries in the second quarter. This is good for the company, but higher numbers forecasts for the quarter make it less likely that the electric car company will be able to deliver a result strong enough to shake the title. And this is negative.
TSLA: + 200% from October 2019
The good news can be bad because Tesla (ticker: TSLA) has put together a series of surprisingly strong quarterly results that have led the stocks to the top. But optimism in the forecasts could weigh on the title when the profits are disclosed, probably in late July.
Tesla has significantly beaten Wall Street numbers in the past three quarters. These strong results helped catalyze the extraordinary title race. Shares increased by more than 200% compared to the numbers for the third quarter of 2019 in October.
The stock jumped nearly 18% after earnings "were posted". Shares rose another 10% after the fourth quarter 2019 numbers were released in late January 2020. However, the stock fell 2,3% after Tesla beat estimates for the first quarter of 2020.
Some predictions
RBC analyst Joseph Spak expects Tesla's next report to report deliveries of 80.900 vehicles in the second quarter, compared to a previous estimate of 72.800. His share price target is $ 615, while the stock traded at around $ 966 on Friday afternoon.
Analysts' estimates and forecasts are circulating everywhere, and it's no surprise given that the factories were closed and then reopened due to the coronavirus crisis. In February, estimates for second-quarter deliveries stood at 125.000, which dropped to 66.000 in May.
The number has now increased slightly. Spak has not updated his profit estimates. He said he would do it after the delivery number was published well in advance of the actual earnings report.
TSLA second only to Toyota Motor (TM) in the automotive sector
With high-value stocks, highflying and high estimates, every quarterly earnings report matters. Uncertainties and expectations gaps can generate volatility, which most investors don't like, even if earnings trends are what matters in the long run.
The Tesla stock qualifies on all three points. The shares are trading around 77 times their estimated earnings in 2021, much higher than the shares of other auto makers. The stock has grown about 135% year to date, although the S&P 500 and Dow Jones Industrial Average remain in the red.
Tesla is the second most valuable automaker in the world, following only Toyota Motor (TM), despite Tesla selling hundreds of thousands of cars every year and Toyota selling millions.
