By Sam Boughedda
Tesla’s (NASDAQ:) price target was lowered from $1,300 to $1,200 per share by Morgan Stanley analyst and staunch Tesla bull Adam Jonas on Wednesday.
Jonas said the firm’s second quarter unit estimate was reduced to 270k units from the previous 316k units, bringing its FY22 volume forecast to 1,390mm from 1,425mm previously.
“We have lowered our Q2 volume guidance (latest data, China), with most of the shortfall offset by Q2 volume and higher prices. Target drops to $1,200 (from $1,300) almost entirely due to the increase in WACC to 9% from 8.5% previously,” Jonas said.
Jonas added that with their volume estimates, they allowed for some “upside modicum” given Tesla’s “historic ability to significantly increase production/sales in the latter weeks of a given quarter.”
“According to data from EV-Volumes, since 2019, in the 3rd month of a given Q, TSLA’s sales ranged from 47% to 69% of its quarterly sales. This continued into 1Q22 where sales of March accounted for 58% of quarterly sales.With TSLA’s second-quarter sales estimated at around 100,000 units through May (EV-Volumes), we believe TSLA will put its manufacturing prowess to use, aided by the accelerating the ramp-up of Austin and Berlin, and will deliver approximately 170-175,000 units in June, down slightly from the 180,000 units delivered on March 22.”
The analyst maintained an overweight rating on the stock, adding that he would buy Tesla’s weakness on a potentially weak second-quarter print.