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Tesla stock analysis

Tesla (TSLA): Do not believe the hype, says analyst
The electric car giant Tesla (TSLA) is at the top of its game and reached another all-time high on Wednesday, reaching the long-awaited $1,000 mark. The latest surge followed when a memo from CEO Elon Musk told employees that it was “time to give it all” for the production of the Tesla Semi.

However, the latest Tesla rally gained momentum earlier this week when reports came out that demand for Model 3 in China has increased. The news channels focused on the 11,095 Model 3 that were taken out of Tesla’s Shanghai Giga 3 factory last month and are now facing a new home.

However, GLJ Research analyst Gordon Johnson argues that the celebrations are premature and the numbers are in fact misleading.

“Yesterday’s May 2020 sales figures for China, reported by almost all news agencies, were released by the China Passenger Car Association (“CPCA”)… More clearly, according to the CPCA, the figures released yesterday by the CPCA were only an estimate and were not confirmed,” Johnson said.

According to Johnson, the figures to watch out for are those published by the China Automotive Technology and Research Center (CATARC) or the China Banking and Insurance Regulatory Commission (CBIRC).

Okay, so where are they? “Those figures are not yet available,” Johnson added, “so all the Reuters and Bloomberg articles from yesterday are wrong. The many analysts commenting on these numbers on television today are also wrong.”

While the TSLA production figure of 11,501 is not disputed by the analyst, Johnson believes that “we don’t yet know how many cars TSLA sold in China in May.

What we do know, Johnson adds, are the sales figures for Tesla in the EU. “They were pretty bad,” he said.

They were down 5.2% on the previous month and 33% on the previous year, as chance would have it. In addition to this sales declined by 54% in the second quarter of 20 up to 8th June in comparison with the previous quarter and by 75% year on year in “Norway + the Netherlands + Spain which accounted for 47% of all TSLA sales in the EU in 2019.

“But”, Johnson summarised, “who cares about figures/facts when Ron Barron says on TV almost monthly that without supporting details the TSLA share will increase 10 times over – and also says he wants to buy more even though he has sold… why won’t the media focus on the numbers instead of having people constantly speaking out about what Tesla will do in 2025? what about 2020?
Although not as confused as Johnson, the road does not seem to be in sync with Tesla’s rise. 9 Buy, 9 Hold and 10 Sell ratings add up to a Hold Consensus rating. With an average target price of $633.95, analysts expect Tesla stock to fall 38% in the next 12 months.

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