Tesla Stock Gets No Help From Record Deliveries. Here’s What Wall Street Thinks. – Barron’s

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Brand new Tesla cars sit on a truck outside of a Tesla dealership on April 26, 2021 in Corte Madera, California.

Justin Sullivan/Getty Images

Tesla posted record deliveries for the second quarter, but investors shrugged.

The latest numbers were close to Wall Street estimates, and mark the fourth straight quarter of record deliveries for the rapidly growing EV pioneer. Still, Tesla bulls on Wall Street remained enthused.

Tesla delivered 201,250 cars in the second quarter, but its stock was down about 0.3% in recent trading, after bobbing up and down Friday. The S&P 500 and Dow Jones Industrial Average were up about 0.6% and 0.4% respectively.

RBC analyst Joseph Spak wrote deliveries were a little better than the Wall Street consensus, adding “encouragingly, production outpaced deliveries.” That shows Spak that Tesla (ticker: TSLA) is successfully managing the through semiconductor supply constraints.

A global semiconductor shortage has affected the entire auto industry. Benchmark analyst Mike Ward, for instance, believes it reduced North American auto production by about 1 million light vehicles in the first half of 2021.

Spak rates Tesla shares Hold and has a $725 price target for shares. Ward covers auto stocks, but doesn’t cover Tesla.

Baird analyst Ben Kallo wrote Tesla’s results showed “operational prowess,” as the company managed to navigate the chip shortage and produce another quarterly delivery record. “We are increasingly confident in our [second half] delivery assumptions,” he writes. “We estimate that underlying demand for Tesla products remains strong with S/X, Cybertruck, and semi deliveries remaining tailwinds.”

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He estimates Tesla will deliver about 868,000 vehicles in 2021, above the Wall Street consensus at about 855,000 to 865,000 vehicles.

Wedbush analyst Dan Ives is even more optimistic and believes Tesla will deliver closer to 900,000 vehicles in 2021. He called the quarterly figure “impressive.”

New Street Research Pierre Ferragu also expects Tesla deliveries to accelerate in the second half of 2021. He points out that Tesla produced about 204,000 Model 3 and Y vehicles in the second quarter, indicating that production in Shanghai is ramping higher.

Ferragu, Ives, and Kallo are all Tesla bulls, rating shares Buy. Ferragu’s target price for the stock is $900, while Ives’s target price is $1,000. Kallo’s is the lowest of the three at $736.

GLJ analyst Gordon Johnson is a Tesla bear. He rates shares Sell and has a Street low price target of $67, and was unimpressed by deliveries. He said Tesla critics will focus on the fact Tesla made more cars than it delivered in the quarter, unlike the first quarter quarter of 2021 and the fourth quarter of 2020. Deliveries and production, of course, should closely match over time.

Next up for analysts, after digesting deliveries, will be earnings, due out in late July. Wall Street expects about 95 cents in per-share earnings. Tesla reported 93 cents in per-share earnings for the first quarter of 2021.

Tesla’s last record quarterly operating profit came in the third quarter of 2020 when it reported a profit of $809 million. For the second quarter of 2021, analysts are looking for about $961 million–another record.