Morgan Stanley Analyst Updates Tesla Model 3 Production Estimates
AUG 21 2017 BY STEVEN LOVEDAY
Adam Jonas updates his delivery estimates for the Tesla Model 3 and also moves his Tesla stock price in a positive direction.
Jonas, an analyst for Morgan Stanley and close follower of Tesla stock, is ranked 444 out of 4,618 analysts on Tip Ranks. He shows an average return of 11.6 percent and a 53 percent success rate. As far as Tesla stock goes, Jonas holds a 51 percent success rate and 31.1 percent average profit per rating on the stock.
Since the recent Tesla Model 3 handover event, it seems some analysts are beginning to change their tune regarding Tesla’s ability to deliver the Model 3 on time. The automaker plans to spend $2 billion in the second half of this year alone. This is spending that approaches that of legacy automakers that churn out millions of vehicles per year. Jonas shared (via Electrek):
“This level of spending approaches the vicinity of established OEMs (i.e. Honda and Nissan) and is one-half or more the spending levels of GM and Ford.”
Previously, Jonas’ Model 3 delivery predictions showed zero units in Q3. The analyst has upped this to 1,500 and upped Q4 estimates by 8,000 as well. He’s still not convinced that Tesla can pull off its 2018 estimates, but that may change as time goes on. Jonas’ note to clients states (via Electrek):
“Now that the first employee deliveries have been made, we are forecasting Model 3 volume in Q3 of 1,500 units vs. 0 units until Q4 previously. An 8,000 unit increase in our Q4 Model 3 volume estimates and smaller increases in Model X volume leaves us with a full- year unit estimate of 106,552 vs. 96,219 previously. Our outyear Model 3 estimates also increase – e.g. to 120k in 2018 vs. 90k previously. We have reduced the Model 3 ATP to $50,000 vs $60,000 previously, which slightly tempers the revenue impact but could arguably be positive for Model 3 demand in the long term.”
Though Jonas bumps his stock price target up to $317, from a previous $305, this is still well below Tesla’s current price ($337.86 at the time of writing – real time quote here). Jonas did, however, increase his bull case to $526 per share.