Analysts chime in as Tesla Motors Inc (NASDAQ:TSLA) generates robust delivery results that make its fiscal third quarter unparalleled since the electric car giant’s founding and Deutsche Bank AG (USA) (NYSE:DB) conversely confronts negative Bloomberg publicity questioning whether the banking giant’s revenue and profits are about to take a turn for the worse. Let’s take a closer look:
Tesla Motors Inc
Tesla is celebrating after delivering its strongest fiscal quarter from deliveries of around 24,500 vehicles, which marks a 70% upswing in year-over-year and a 37% sequential rise. As the electric car giant continues to ramp up production to meet CEO Elon Musk’s ambitious projections to produce one million cars per year by 2020, Baird analyst Ben Kallo remains bullish as the analyst recognizes “full-year targets in sight,” believing TSLA could very well reach its production goal of 2,400 vehicles per week by the close of fourth-quarter.
As the giant “significantly beat” Kallo’s delivery projection, the analyst reiterates an Outperform rating on shares of TSLA with a $338 price target, which represents a 58% increase from where the stock is currently trading. Moreover, Kallo asserts, “we believe shares will move higher.”
Even as management is aware of “potential seasonal headwinds,” TSLA remains confident in its “positive strides in increasing production,” and therefore reiterates guidance for the second half of the year of 2016 to fulfill 50,000 deliveries.
“TSLA announced it delivered ~24.5k vehicles in Q3, surpassing our estimate of 21k. Management expects production to continue to ramp, indicating Q4 deliveries should meet or exceed Q3 numbers. Shares should trade higher as TSLA executed on production and reiterated 2H:16 guidance. Bears will focus on the upcoming capital raise, but we continue to recommend shares ahead of the potential deal due to several upcoming catalysts,” Kallo concludes.
Among these catalysts Kallo assesses are TSLA’s gigafactory ramp, swirling news surrounding the Model 3, and even possibly the Paris Motor Show.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, two-star analyst Ben Kallo is ranked #2,309 out of 4,197 analysts. Kallo has a 43% success rate and earns 0.3% in his annual returns. When recommending TSLA, Kallo gains 14.6% in average profits on the stock.
TipRanks analytics exhibit TSLA as a Hold. Based on 13 analysts polled in the last 3 months, 3 rate a Buy on TSLA, 6 maintain a Hold, while 4 issue a Sell. The 12-month price target stands at $222.33, marking a 4% upside from where the shares last closed.
Deutsche Bank AG (USA)
Merrill Lynch analyst Andrew Stimpson is out with a research report on Deutsche Bank on back of negative press reports indicating that a small number of hedge funds had diminished business with the banking giant, which Bloomberg believes will translate to a dip in revenues as well as in profits.
In light of these difficulties ahead with profit and capital, Stimpson reiterates an Underperform rating on DB with a price target of $10, which represents a nearly 23% downside from where the shares last closed.
The analyst believes, “On a positive note, such scenarios are modelled as part of the liquidity coverage ratio (LCR) already and are easily covered by the €223bn liquid asset reserves. Further press rumours (AFP, 30 September) that the DoJ may be prepared to settle for $5.4bn saw shares rally significantly, but is still more than our modelled number. We therefore continue to see dilution risk. In the meantime, underlying profitability remains weak at 5-6% RoTNAV, partly from low rates.”
“The bank already pays no dividend and is shrinking its non-core unit. The bank has ruled out a disposal of the asset management businesses. We also see the rarely-observed transitional capital requirements as playing a role in pressuring DBK,” Stimpson contends, believing the giant could struggle in drumming up enough “earnings power to achieve the future ‘minimum.'”
According to TipRanks, three-star analyst Andrew Stimpson is ranked #1,409 out of 4,197 analysts. Stimpson has a 78% success rate and yields 10.1% in his yearly returns. When recommending DB, Stimpson realizes 10.9% in average profits on the stock.
TipRanks analytics demonstrate DB as a Sell. Based on 4 analysts polled in the last 3 months, 2 rate a Hold on DB, while 2 issue a Sell. The consensus price target stands at $11.16, marking a 14% downside from where the stock is currently trading.