Good reading. There's alot of FUD tone creeping into to this. It not clear how much of this is coming from Jonas and how much from the journalist writing up Jonas's note. In any case, there's alot of innuendo. This happens when a writer wants to cast something in a negative light, but cannot say exactly what the problem is. Then there's the suggestion that if the reader were perceptive or sufficiently aware they would know for themselves what those unstated problems. This is a form of flattery aimed at getting the reader to nod along that surely they are smart enough to have this all figured out and do not need consider any actual data to substantiate the claim.Did other people read the report in neutral tone? Yes, the outweight rating and $10 PT drop does sound neutral. But AJ looks like one of biggest FUDsters of TSLA now, here is what I extract from digest by Streetinsider.com:
1) Tesla's growth and ambition may expose Tesla to risks investors havenot prepared for.
2) Musk's 'no US GAAP profitability by the year 2020' comments compared toJonas' forecast of Tesla achieving nearly $1.6 billion of US GAAP profit by2020.
3) In any case, for a stock where many untested long-term earnings andgrowth assumptions must be made to value the company, the comments take thetone of forecast uncertainty to entirely new levels."
4) Jonas said Tesla is feeling pressure from 3 different sources: (1)Falling oil price, (2) stronger US dollar and (3) questions about the long-termearnings trajectory.
5) The analyst also notes Tesla has significant transaction exposureto a stronger dollar. If you have not made a negative FX adjustment to your Tesla numbers... youreally should
6) The firm's 4Q volume forecast goes to 9,993 units from 11,165 units,taking full year volume to 31,814 units, or more than 1,000 below thecompany's FY target. This change, along with $20mm of FX headwinds (and lower ATPs) takestheir 4Qgross margin assumption to 28.0% from 29.6% previously.
7) There has been a lot written about how Tesla's advancement of electricmobility can make the internal combustion engine 'obsolete' in just a fewyears. Wefirmly disagree and don't need such an outcome to make Tesla a good investmenttoday.
For example, the suggestion that the reader ought to make their own negative FX adjustment. Merely suggests that there may be a problem here, but in stead of working through the assumptions and adjustments, just talks over the head of anyone who might not have the accounting background to make such adjustments. So either you're supposed to pretend that you already know and agree with this or feel humiliated and just take them at their word. The fundamental problem with actually doing the "exposure to a stronger dollar" (more jargon to inflate or put down the reader) is that Tesla bases its international prices on the US price, so that it makes the same margin on a car regardless where it is sold. Granted there can be a time lag between when exchange rates change and when they adjust prices accordingly, but this is a transitory issue entirely within Tesla's timeling and discretion. Moreover, since Tesla remains supply constrained, there is no loss of revenue for Tesla when they price consistently under prevailing exchange rates. So whatever obscenity "exposure to a stronger dollar" may suggest, it really is a small issue for Tesla. Tesla can reset prices anytime it so chooses.
So anyway the author here is definitely playing mindgames with the reader. Classic FUD rhetoric, you nailed it.