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Tesla Motors Inc. (TSLA): Delivery Figures for Q315 and Launch of Model X; Mixed Reactions from Analysts

By George MacDonald

Tesla Motors Inc. (NASDAQ:TSLA) recently announced the delivery of 11,580 vehicles in the third quarter, missing its guidance of nearly 12,000 vehicles. The company has also been in the news for its recently-launched SUV, the Model X.

On October 7, analyst Ben Kallo of Robert W. Baird downgraded Tesla to Hold and dropped his price target on the stock to $282, from $335. Reasons behind his downgrade are uncertainty about the timing of increase in production of the new model and also its higher-than-expected price.

Talking about the new Model X, Kallo noted, “Given the complexity of the vehicle, we believe the ramp will be slower than expected, which could impact 2015/2016 vehicle delivery estimates.” Kallo has reduced the non-GAAP EPS estimates for the company for 2016 (to $2.00 from $3.00) and for 2017 (to $4.70 from $6.07).

Kallo has rated Tesla a total of 39 times, earning a 58% success rate recommending the stock and a +24.5% average return per recommendation when measured over a one-year horizon and no benchmark. Overall, he has a 49% success rate recommending stocks and a +7.3% average return per recommendation.

On October6, Morgan Stanley analyst Adam Jonas cut his price target for Tesla to $450 (from $465), while maintaining an Overweight rating. According to The Fly, while the new model has met Jonas’ “very high” expectations in terms of technical capabilities, the average transaction price is “easily” $10,000 to $15,000 higher than his expectations. Given the higher-than-expected price, Jonas has cut his annual Model X forecasts between 5,000 and 10,000 units for 2016-2018.

Jonas has rated Tesla 35 times total, earning a 66% success rate recommending the electric car maker and a +36.7% average return per recommendation when measured over a one-year horizon and no benchmark.

A day earlier, on October 5, Colin Rusch of Oppenheimer maintained an Outperform rating on Tesla with a price target of $340.

Rusch said, “While the shipment numbers amount to a 3.5% difference between guidance and deliveries, the total number of vehicles is relatively small at 420. We believe that can be made up in 4Q:15. Furthermore, our 2015 estimate shipments remain the same at 50,577 (guidance of 50K-55K). Our 2015E non-GAAP EPS moves slightly lower, to ($0.16) from ($0.10), as we shift sales to 4Q:15 and expect some drag on GM due to the Model X ramp. The balance of our estimates remain the same.”

Rusch concluded by saying, “We believe investors will also focus on meeting shipment guidance for the year, launching its stationary storage business, and progress on the Gigafactory and development of the Model 3.”

Rusch has rated Tesla 10 times, earning an 80% success rate recommending the company and a +137.7% average return per recommendation when measured over a one-year horizon and no benchmark. Overall, he has a 51% success rate recommending stocks and a +18.5% average return per recommendation.

Out of 19 analysts polled by TipRanks who have rated Tesla within the last three months, nine analysts are bullish on the stock, four are bearish, and six remain on the sidelines. The average 12-month price target on Tesla is $301.47, marking a potential upside of 31.18%