Tesla's Early Earnings Report Date Likely a Positive, Morgan Stanley Says

(Bloomberg) -- Tesla Inc.’s surprising pull forward of its third-quarter earnings release to post-market on Oct. 24 is “more likely a positive sign than an adverse sign,” according to Morgan Stanley. Shares are up as much as 10.7 percent, reaching its highest intraday level in nearly three weeks.

With Tesla at “the most critical point in the ramp of its most important product (Model 3) and is arguably at the most critical point of its liquidity/access to capital since it has been a public company,” it’s doubtful that it would “pull forward the introduction of adverse news into the market now,” according to analyst Adam Jonas.

Jonas expects a “strong” profit and cash flow guide for the fourth quarter, supported by “stronger volume, peak mix and negative working capital mechanics.” He rates the car maker at the equivalent of a hold with a price target of $291. According to data compiled by Bloomberg, the company has 10 buys, 12 holds, 13 sells, and an average price target of $304.

Tesla is likely to provide details on the Model 3 ramp pace “that coincide with an extraordinary inflection in the volume of Tesla vehicles leaving the factory,” Jonas says. He expects another 75,000 units to be added in the fourth quarter.

Tesla will hold a conference call at 6:30pm ET Oct. 24. It was estimated that Tesla would report quarterly results next week. The company reported third-quarter 2017 results Nov. 1.

To contact the reporter on this story: Janet Freund in New York at jfreund11@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Brad Olesen

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