Social Capital CEO Chamath Palihapitiya told CNBC on Thursday that Tesla’s growth is no longer about its electric cars, but its renewable energy components. That could make Elon Musk’s company worth trillions, he added.
Tesla reported Q2 adjusted EPS of 50c versus the consensus estimate of (11c). The company reported Q2 revenue of $6.04B versus the consensus estimate of $5.23B. Free cash flow for the quarter was $418M.
On July 23, 2020, as reported before the open, Cowen analyst Jeffrey Osborne upgraded Tesla to Market Perform from Underperform with a price target of $1,100, up from $300, following the company’s Q2 report. The analyst said he “fully admits” to having been wrong on Tesla the last few years, as its execution on margins, cost control, and faster ramp-up of factories and new vehicles have all beat his expectations. Osborne added that the stock “tends to work when something new is coming” and highlighted that Tesla has numerous new products and events over the next one to two years, starting with its battery day event on September 22.
Oppenheimer analyst Colin Rusch raised the firm’s price target on Tesla to $2,209 from $968 and keeps an Outperform rating on the shares. The analyst notes that Tesla posted top- and bottom-line Q2 upside on better than expected ASPs and Automotive gross margin ex-regulatory credits. In addition. the company indicated it had reached full ramp on Model Y capacity and is progressing well on additional capacity, including Model Y design adjustments from improved manufacturability, he adds. As such, Rusch is accelerating his production ramp estimates through 2025, noting that he is not yet giving Tesla credit for potential from its targeted L4/L5 ADAS program or its stationary energy storage opportunity as he believes the company has significant execution and regulatory hurdles to surmount. The analyst thinks Tesla continues to extend its product and process technology advantages as it disrupts the transportation industry by being better, faster, and cheaper than competitors.
Wedbush analyst Daniel Ives raised the firm’s price target on Tesla to $1,800 from $1,250 and established a new bull case of $2,500, while keeping a Neutral rating on the shares. The analyst notes that Tesla reported its June results that came in much better than expectations as it delivered an “Aaron-Judge like home run quarter” and continue to defy the skeptics with the company also surprisingly reinstating its original unit delivery target of 500K units in fiscal year 2020. While delivery numbers were known and way better than Street expectations given the current economic back drop, Ives points out that investors continue to be laser focused on the profitability picture of Tesla. To this point GAAP gross margin was strong at 21.0% again beating the Street’s expectation of 19.1%, with adjusted EBITDA of $1.2B/margin of 20.0% speaking to a business model which continues to have significantly lower costs and more production efficiency even in the face of challenging circumstances globally given COVID-19, he contends.
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