Thursday, October 27, 2016

Tesla up $10 Despite Negative Analyst Comments

Tesla has a rare profitable quarter - Monster beat against analyst expectations (Tesla reports Q3 non-GAAP EPS 71c, consensus 9c) - guides solid-idly with respect to the Model 3 launch. Indicates its going to redefine Uber's model (The largest privately held company known) Yet the street continues to talk down the price as a 20-30% short float remains. 

Tesla quarter not as good as it looks, says JPMorgan  

JPMorgan analyst Ryan Brinkman says Tesla's Q3 earnings report is not as good as it looks. At first glance, the quarter looks like a "very strong beat" across all metrics, Brinkman tells investors in a research note. Tesla, however, reported a $139M benefit from the sale of Zero Emission Vehicle credits versus its guidance for a negligible amount, which alone helped earnings per share by 73c, the analyst contends. Brinkman also sees some "comparability issues" relative to Tesla's reported revenue, gross profit, and net income given the "complicated" change in accounting methodology. The analyst views the quarter as good, just not as good as it looks on the surface. He keeps an Underweight rating on Tesla with a $180 price target. The electric carmaker is up 5%, or $10.16, to $212.40 in pre-market trading.

Goldman sees Tesla's capital needs pushed out until Q3 2017 

Goldman analyst David Tamberrino said Tesla reported a solid Q3 but it is not enough to overcome what he sees as increased risk to the company's capital deployment strategy and uncertainty in 2017 from the Model 3 launch. The analyst now expects Tesla will need to raise capital in Q3 2017 from Q4 2016 previously as the Model 3/gigafactory capex spend is weighted towards 1H 2017. Tamberrino raised his price target on Tesla to $190 from $185 and maintains his Neutral rating.

Oppenheimer remains cautious on Tesla Model 3 ramp  

Following Tesla's Q3 results, Oppenheimer analyst Colin Rusch expects bulls and bears to see support for their theses in this quarter's report. While bulls will point to profitability, cash generation, solid deliveries, and guidance for Model 3 production in 2017, bears will pick apart gross margin, he noted. The analyst is encouraged by the company's improved cash management but remains cautious on the ramp of the Model 3 being slower and more expensive than investors expected weighing on shares. Rusch reiterates a Perform rating on the stock.

Tesla catalysts should drive shares higher, says Baird

Baird analyst Ben Kallo said Tesla beat Q3 estimates across the board and management gave positive commentary. The analyst noted its strong gross margins and improved operational efficiency. He also noted that management said a capital raise may not be necessary for the ramp of its Model 3. Kallo reiterated his Outperform rating and $338 price target on Tesla shares.

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