Investors winced when Tesla announced its latest dismal sales figures. Analysts expected weakness, having slashed estimated deliveries from about 530,000 to 450,000 cars over the past year.
However, even that proved optimistic, with Tesla reporting just 386,810 deliveries. Shares hit new lows for the year, although a rebound on Thursday offered some respite for investors.
Meanwhile, market watchers were aghast. Wedbush analyst Dan Ives described it as a “train wreck into a brick wall quarter”, an “unmitigated disaster ... that is hard to explain away”.
A long-time Tesla bull, Ives thinks Tesla can turn things around, but he admits that if Tesla cannot “navigate through the turbulence”, this may only be the start of a “darker chapter” in Tesla’s story.
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JPMorgan certainly thinks darker times are ahead, saying “even the most bullish investors” must take a sentiment check. It lowered its price target on Tesla, which is trading around $175 (€162), to $115 (€106). Despite shares falling 60 per cent from their highs, Tesla’s valuation is “still demanding”.
That’s true. Still valued at over half a trillion dollars, Tesla trades on 54 times expected earnings. Little wonder investors are not looking forward to Tesla’s earnings report in a fortnight.
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