Courtesy of Tesla, Inc.
In the wake of Tesla’s impressive Q2 deliveries, Wall Street is once again adjusting its expectations for the electric car maker.
The most recent adjustment comes from Jefferies analyst Philippe Houchois, who raised his firm’s Tesla price target on Monday from $185 to $265, reports Yahoo Finance. Despite the hike, the new target remained 3% lower than Tesla’s opening price of $274.43.
Tesla’s Q2 report revealed global production of 479,700 units, and deliveries totalling 466,140, figures that easily outpaced Wall Street’s consensus estimates of 448,599 units. These totals set new records for the electric vehicle manufacturer.
While Houchois maintained a Hold rating on Tesla, he predicted a significant upswing in the company’s fortunes. “We join a consensus view that Q2 will be a trough in auto gross margin,” Houchois wrote. He attributed the shift to Tesla’s leadership in AI-based self-driving software, a view also noted by Goldman Sachs and Morgan Stanley.
However, Houchois also forewarned of a possible dip in Tesla’s automotive gross margin to 18.6% for Q2, a significant drop from Q1 levels. He stated that it’s still unclear whether recent price cuts were the driver behind Tesla’s Q2 deliveries, which saw only a 10% increase.
Despite these concerns, the long-term outlook for Tesla from Jefferies remains bullish, with Houchois stating that Tesla continues to outperform traditional automakers operationally. Investors will be keenly watching when Tesla releases its Q2 earnings results on July 19.
