Tesla Down as Evercore Cuts Delivery Estimates, Price Target

(Bloomberg) -- (Updates stock move in first paragraph.)

Tesla Inc’s price target was cut to $200 from $240 by Evercore ISI analyst Arndt Ellinghorst, who also reduced delivery estimates across all models amid lingering production concerns. Shares of the company fell as much as 3% in New York on Wednesday.

• The analyst now expects 343,000 total deliveries for 2019 vs prior estimate of 368,000, below the company’s guidance of 360,000-400,000
• Ellinghorst also cut revenue estimates for the company by 3% for 2019, 1% for 2020, and by 6% for 2021, citing concerns around production, demand and macroeconomic conditions
• Ellinghorst said Tesla still trades at a huge valuation premium to any automotive peers and the "only thing that can justify such valuations is supernatural growth and best-in-class execution"
• The analyst is "relatively sanguine" around near-term demand for Model 3, but said that given continued and persistent delays around battery production, Tesla will have to prove its ability to dramatically scale production across multiple models to reach its lofty aspirations and second-quarter guidance
• Said Model 3 volumes are expected to peak in 2020 after 3 years in the market with potential cannibalization from 2021 Model Y launch
• Maintained underperform rating
• Tesla has 11 buys, 10 holds, 15 sells; avg PT $297: Bloomberg data
• NOTE: May 13, Tesla Hammered Hardest by Fear China Will End Car-Tariff Respite

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Will Daley

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