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Discussion in 'News' started by mitch672, Jul 18, 2012.
Tesla Cuts Model S Production Goal For Third Quarter To 500, Analyst Reports
Just saw this...
Analyst: Tesla Cuts Model S Production Goal for Third Quarter to 500
Per Green Car Reports: http://www.greencarreports.com/news/1077816_tesla-cuts-model-s-production-goal-for-third-quarter-to-500-analyst-reports?utm_source=GreenCarReports&utm_medium=twitter
Anyone else heard anything on this?
Not a big surprise, given what people have reported about their delivery dates.
It's quite an overreaction to cut the stock target. You can't draw any conclusions at such an early date.
I look forward to the upcoming 2Q SEC filing and earnings call, should provide details if their production ramp up is going slower than expected. They need to on average increase their daily production by 14 cars a a month to get near the 5000 Model S's by the end of 2012. I'd rather they take their time and miss a few targets than deliver lower quality cars than get bad press.
If Tesla is saying they will still deliver 5,000 cars this year, the Wunderlich downgrade is really harsh. What's the big deal that more of the revenue will be in Q4 versus Q3?
Morgan Stanley is forecasting only 3,000 deliveries total in 2012 and maintaining their target price of $45, at least for now (let's hope no downgrade from them).
It's disappointing to hear this, but it will be FAR too damaging if they're pushing out not-yet-ready products. The negative publicity of "another Model S dies in the middle of the interstate" or "more reported Model S problems" is going to be a lot more harmful to sales and ultimately have a bigger impact on investors I think.
Get the production line right the first time and things will go much more smoothly down the road. So I'll keep on being patient.
I agree, though I would imagine if they are holding cars back it's due to quality control issues like body panel fit, interior options etc vs a critical issue in the power train.
We really have no evidence for anything other than cosmetic and interior issues. These are design problems, not manufacturing problems. They only secondarily affect production, because they want to hold the line back to avoid having to retrofit a bunch of shipped cars with opportunity consoles, non-CF valences/diffusers, etc. I think what we are seeing is a result of their very aggressive testing timeline. Sure, this stuff should have been found earlier, but it was not. So, they pause production to get these items re-designed and re-source, and we are off to the races. There is no evidence that the production line itself has issues.
I agree with all comments. I think the powertrain is pretty well fleshed out and the delays are due to relatively minor fit/finish, door handle, and console redesign delays.
Drastically cutting the stock price and changing from buy to sell is absolutely ridiculous, especially given the positive initial driving reviews. Wunderlich is being foolish. 500 less deliveries in the 3rd quarter (almost certainly made up for in the 4th quarter) does not mean the company and product are headed downhill. In fact, just the opposite. If quality trumps production numbers that's a positive in my book.
The last few years have taught me two things:
1. The financial industry doesn't exactly know what they're doing much of the time.
2. Don't bet against Elon Musk.
This should resolve itself next week one way or another when they have their earnings announcement and Q&A. At that point, Tesla will basically be obligated to either say they're on track with the 5000 cars to be produced this year, or not. If they announce a change in expected production for the year, presumably they'll provide more detail on what is causing the delays, which may either allay or exacerbate investor's (and reservation holder's) concerns.
I think the stock downgrade has more to do with "market manipulation" than any issues with the Model S
TSLA has massive "shorts"
It's all about the Benjamin's, nothing to do with the company or the products, really.
Agree completely Todd...I find many Financial Analysts to be just like bankers...they think they know your job / your industry better than you do and that given the chance, they could outperform you in this regard...most of them are full of crap imo...
Agreed, if you follow Apples earnings the amateurs almost always outperform the profession analysts's as a whole. Here's a link to last quarters analysis report card.
I agree, however these ratings are primarily intended to be used by day traders. For any trader with a very short term perspective, things look bad (taking a 1 - 3 month view). Anyone with at least a 1 year view will say that these ratings are foolish.
People who follow "financial analysts" are to me the same people who were following real-estate "advisors" in the US in 2005 or in Canada today.