Tesla’s (TSLA) car registrations in China plummeted 64% in April, compared to March, according to consultancy firm LMC Automotive’s data.
Specifically, the electric-vehicle maker’s China registrations dropped to 4,633 units from 12,709 units the previous month. This includes imported cars. “Tesla’s sales in the first month of each quarter are usually lower than the remaining two months” points out Reuters.
Meanwhile sales of Tesla’s Model 3 sedan in China plunged 64% in April vs March, according to the China Passenger Car Association (CPCA). Tesla sold 3,635 Model 3 cars in April, a significant decrease from the 10,160 vehicles sold in March.
Commenting on the stock after a meeting with Tesla’s investor relations, Emmanuel Rosner at Deutsche Bank, kept to his Hold rating with a $850 price target, despite saying that the company’s message was positive.
“While management provided few details about its 2Q/2020 outlook, it believes Fremont production can ramp back up very quickly given its experience in China and that the supply chain is already coming back online,” Rosner told investors.
Indeed, for the second quarter, Morgan Stanley analyst Adam Jonas is forecasting a 2Q delivery drop of 13% Q/Q (19% Y/Y) and free cash burn of $2.7bn. He is also sticking to the sidelines, arguing that with Tesla’s stock trading at 13x projected 2025 EV/EBITDA there are likely better ways to invest in tech right now.
Overall, the Hold consensus is based on 9 Sells, 9 Holds, and 8 Buys. Following the stock’s jaw-dropping 94% YTD rally the $604 average price target projects 26% downside potential in the shares in the next 12 months. (See Tesla’s stock analysis on TipRanks).
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