On Tuesday, Truist Securities maintained a Hold rating on Tesla (NASDAQ:TSLA) shares with a $162.00 price target. Tesla (NASDAQ:TSLA) reported second-quarter unit deliveries that slightly beat consensus expectations. The company said deliveries for the quarter came in at 444,000 units, up 1.7% from the FactSet consensus of 437,000 units and about 1.5% above the company’s own estimate of 438,000 units. However, deliveries fell 5% year-over-year.
Tesla’s production for the quarter was about 7.5% lower than deliveries, totaling 410,800 vehicles. That’s a roughly 14% decrease compared to the same period last year. Truist Securities notes that the company didn’t give a specific reason for the lower production numbers, but suggests it could be due to retooling for upcoming new model launches.
Analysts at Truist Securities also pointed out that Tesla ended the first quarter with 82 days of inventory, the highest since the first quarter of 2020 and significantly higher than the average of around 60 days over the previous eight quarters. Tesla also reported that it had 28 days of global vehicle inventory in the first quarter, the highest since the first quarter of 2019 and nearly double the four-quarter average of 15 days.
Based on delivery and production figures released today, Truist Securities expects Tesla’s balance sheet inventory to fall to around 70 days in the second quarter. While still above normal, it will be lower than the previous quarter and more in line with historical levels.
In other recent news, Tesla reported its second-quarter vehicle delivery forecast, with a total of 443,956 vehicles delivered, up 14.8% from the first quarter. The performance was driven by pricing adjustments that boosted customer demand. However, sales of Tesla’s Chinese-made EVs fell 24.2% year-on-year in June. In contrast, Chinese automaker BYD reported a significant 21% increase in EV sales in the second quarter, signaling a more aggressive competition with Tesla.
On a separate note, Polestar reported a first-quarter operating loss of $231.7 million due to heavy tariffs on EVs made in China. The company is planning measures to mitigate the impact, including adjusting its manufacturing strategy to reduce its reliance on Chinese production.
Meanwhile, Citi maintained a neutral stance on Tesla shares after the company announced second-quarter vehicle deliveries and production numbers. Citi expects a positive reaction in the stock price after the delivery and production reports. Here are some of the latest developments in the EV sector.
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Tesla’s Q2 Delivery Report: A Mixed Bag for the EV Giant
Tesla (NASDAQ:TSLA) reported second-quarter unit deliveries that slightly exceeded analyst expectations, but the company’s production figures revealed a decrease compared to the previous year. Truist Securities maintained a Hold rating on Tesla shares with a $162.00 price target, highlighting both positive and negative aspects of the recent performance.
Strong Deliveries, But Production Lags Behind
Tesla’s second-quarter deliveries totaled 444,000 units, surpassing the FactSet consensus of 437,000 units and exceeding the company’s own estimate of 438,000 units. However, these deliveries represented a 5% decline year-over-year.
Despite the positive delivery numbers, Tesla’s production figures for the quarter fell short. The company produced 410,800 vehicles, a significant 14% decrease compared to the same period last year. Truist Securities attributed the lower production numbers to potential retooling for upcoming new model launches.
Inventory Levels Rise
Analysts also pointed out that Tesla ended the first quarter with 82 days of inventory, a substantial increase from the average of around 60 days over the previous eight quarters. The company reported 28 days of global vehicle inventory in the first quarter, nearly double the average of 15 days over the past four quarters.
While Truist Securities expects Tesla’s balance sheet inventory to fall to around 70 days in the second quarter, it will still remain above normal levels. However, this reduction indicates a move toward more historical levels.
Price Adjustments Boost Demand
Tesla’s second-quarter vehicle delivery forecast reached 443,956 vehicles, marking a 14.8% increase from the first quarter. This performance resulted from pricing adjustments that positively impacted customer demand.
Despite this increase, Tesla’s Chinese-made EV sales experienced a significant year-over-year decline of 24.2% in June. Meanwhile, BYD, a prominent Chinese automaker, reported a substantial 21% increase in EV sales during the second quarter, highlighting intensifying competition in the EV market.
Polestar Faces Challenges
In other news, Polestar reported a first-quarter operating loss of $231.7 million due to significant tariffs on EVs manufactured in China. The company is strategizing to mitigate this impact by adjusting its production strategy and reducing reliance on Chinese production.
Citi Remains Neutral
Citigroup maintained a neutral stance on Tesla shares following the company’s second-quarter delivery and production announcements. Despite the mixed performance, Citi expects a positive reaction in the stock price after the recent reports.
InvestingPro Insights
InvestingPro provides valuable insights into Tesla’s financial health, offering a deeper understanding of the company’s performance. Tesla boasts a robust market capitalization of $730.13 billion, trading at a high P/E ratio of 53.22. This indicates strong investor confidence in its future earnings potential, despite the company not paying a dividend. Additionally, Tesla’s PEG ratio stands at 3.57, suggesting its stock price may be high relative to its earnings growth.
InvestingPro highlights Tesla’s dominance in the auto industry, with liquid assets exceeding short-term obligations, indicating a robust balance sheet. The company’s significant returns over the past week, totaling 12.01%, suggest investor optimism about the short-term outlook.
InvestingPro offers a wealth of analysis and indicators, providing valuable insights and actionable tips for investors.
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This article was translated using the help of artificial intelligence (AI). For more information, please read the Terms of Use.