DaveT (and others please chime in). Since TSLA appears to be behaving with positive market leader momentum, do you feel that with a positive earning season over the next two weeks that we might see a nice 10%+ run up of TSLA before the TM ER? It is difficult for me to get a handle on what Q2ER for TM will be like. I feel (again not real science just reading many posts/articles) that we may have a 'so-so' Q2ER and conference call. The real unknown is the CC. Will Elon pull the GF, Worldwide demand increase, 'boy we are running both lines now at 1,000 cars/week' card that will make TSLA surge post ER?
My thoughts for post earnings are that, even if not a stellar Q2 in terms of deliveries, cash flow, etc. Tesla will be able to explain that all of this is because they are investing time and money to be able to support the unprecidented growth in demand that they are seeing. It would be sad if they just kept going on the path they had plotted for themselves but unable to fulfill this strong surge in demand due to limitations in the manufacturing capability. So, slowing production down temporarily and increasing spending (e.g. 250m Euro on paint shop and production line orders) to address exponential growth in the future should be welcomed as a good thing. (DaveT did a excellent series of posts on Tesla's ability to readjust their plans, think bigger, and move faster.)
So, while I expect initially the stock might get hit due to earnings results that are below guidance and/or street expectations, it will quickly recover and soar, once people realize what is happening.
All it might take is one report from Adam Jonas, Morgan Stanley, to catapult the stock. Remember, his new target of $320 was the beginning of a huge run-up in February. And most importantly, in their modeling, this target was established based on very modest unit production outlook for Model S/X and GenIII by 2020. Consider VolkerP's post today hinting at 500K production capability for GenIII in 2017!
Here are the numbers again from Morgan Stanley's modeler software for the 'base scenario' that justified their $320 price target:
Base Case $320
Successful commercialization of Model S, X and Gen 3 with combined volume surpassing 1.1 million units by 2028. A thriving company with OP margins peaking at 16.4%, normalizing at 15%. A successful Model S and X with combined volume nearly 150k units by 2020. Gen 3 volume reaching 220k units by 2020 and 775k by 2028. 8% OP margin reached in 2014, peaking at 16.4% by 2019, normalize at 15.3%. Our valuation includes $15 for regulatory credits (a $1.9bn EV).
I cannot see a scenario where Adam Jonas will not revise these numbers up again (plus price target), after the Q2 earning call.
