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Tesla Delivers the Goods, but Analysts Remain Divided About the Stock’s Prospects


As the saying goes, it’s all in the delivery. Fortunately, for Elon Musk, we are not referring to his tweets, but to the company’s Q4 delivery numbers, which beat expectations across the board.

Specifically, Tesla (TSLA) delivered 112,000 units in the fourth quarter, beating the Street’s estimate of 106,000 and totaling 367,000 for the whole year. The figure comes within the company’s yearly guidance of 360,000 – 400,000 units and provides a 50% increase over 2018 figures.

The growth was largely driven by the company’s low-cost newest addition; Model 3 deliveries of 92,550 beat the Street’s 87,940 estimate and represent 83% of total deliveries.

Tesla’s share price a week into the new year is up by almost 6% and continues an outstanding finish to the final months of the decade. Tesla had a bumpy ride in 2019, but the turnaround, though, has been impressive with TSLA stock up over 80% since the start of October.

2020 is shaping up to be a big one for Tesla with China’s Giga 3 production in full swing and Musk’s electric vehicle vision potentially becoming a reality. Tesla has started delivery of its China-made Model 3 units to local company employees and will begin deliveries of the vehicles to the public on Jan 7. As China represents the world’s largest auto market, the opportunity for expansion cannot be overstated.

Wedbush’s Daniel Ives noted, “With the first Chinese made Model 3s delivered over the past week and Giga 3 producing over 1,000 cars per week, the bull/bear debate will center around ramping production and demand to the 100k/150k level annually in China and how quick this dynamic will ramp. If Tesla is able to sustain this level of profitability and demand for the company going forward, especially in Europe and China, then the stock (and bull thesis) will open up a new chapter of growth and multiple expansion in our opinion.”

To this end, the 4-star analyst reiterated a Neutral rating on Tesla stock alongside a price target of $370, which implies possible downside of 16.50%. (To watch Ives’ track record, click here)

Presenting the bullish case for the electric car pioneer is Canaccord’s Jonathan Dorsheimer; “We believe the trend towards electrification will only accelerate in 2020,” the analyst said. “While bears have feared demand issues as a function of tax credit expiration for Tesla, we suspect a solid Q4 combined with the robust Q3 should put these fears to rest and put to rest this issue as the credit expires.”

Dorsheimer reiterated a Buy rating, while raising his price target from $375 to $515, implying upside potential of 16%. (To watch Dorsheimer’s track record, click here)

Currently, the Street is taking the Wedbush analyst’s view, and sitting on the fence, too. Specifically, TSLA has a Hold consensus rating, which breaks down into 8 Buys, 7 Holds and 11 Sells. The average price target comes in at $300.46, and reveals the Street sees the stock losing 32% over the next 12 months. (See Tesla price targets and analyst ratings on TipRanks)

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