Deutsche Bank is quite optimistic about Tesla’s second-quarter results. In a recent update, the firm reiterated its “Buy” rating on the electric vehicle maker’s stock, from $200 per share to $230 per share. The firm’s estimates came just days ahead of the expected release of Tesla’s Q2 2023 vehicle delivery and production report.
With the end of the second quarter in sight, Tesla is expected to report its delivery and production numbers for Q2 sometime this weekend. With this in mind, Deutsche Bank opted to revise its estimates, with the firm expecting Tesla to deliver 448,000 vehicles in the second quarter. That’s a 76% year-over-year increase and a 6% quarter-over-quarter growth.
The firm estimates that Tesla would likely deliver 153,000 units of the Model 3 and Model Y in China and about 168,000 in North America. The bank also estimated that around 87,000 of Tesla’s Q2 deliveries would be coming from Europe, and around 23,000 would be coming from the rest of the global market.
With these in mind, Deutsche Bank opted to raise its Q2 2023 revenue estimates to $24 billion, up $500 million from its previous estimate of $23.5 billion. In comparison, the Street’s revenue estimate stands at $24.3 billion. The firm also raised its gross margin estimates for Tesla, from -200bps q/q previously to -140bps q/q, as noted in an Investing.com report. Deutsche Bank also raised its Q2 EPS estimate from $0.73 to $0.79, in line with the Street’s estimates.
“Beyond the quarter, we still see risk of additional price cuts over the rest of the year and into 2024. At our recent DB Global Autos Conference, Tesla reiterated it would continue to stay nimble with pricing, and while its costs will come down in the remainder of the year, the company indicated the more important question remains whether they will come down at the same pace as price should it need to take further cuts,” the Deutsche Bank analysts noted.
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