Connect with us
tesla supercharger tesla supercharger

Investor's Corner

Tesla bull Ives expects ‘across the board’ Q3 Earnings Beat following record deliveries

Credit: Tesla

Published

on

Tesla (NASDAQ: TSLA) bull and Wedbush analyst Daniel Ives expects the electric automaker to deliver an “across the board” Earnings Call beat on Wednesday after reporting record deliveries earlier this month.

Tesla reported in early October that it had delivered 241,300 vehicles in Q3, a record for the company. Deliveries mostly consisted of Tesla’s mass-market Model 3 and Model Y vehicles. However, following the initial deliveries of the Model X Refresh, which began last weekend, Tesla now has its full vehicle lineup once again.

The return of Tesla’s flagship SUV to the vehicle lineup bodes well for Tesla’s future production capacity and delivery figures. Ives believes the pace of Tesla’s growth, which is supported by Quarter-over-Quarter delivery records and the expansion of sales in China, primes the company to report another Earnings beat in every important metric on Wednesday.

Tesla stock (TSLA) is roaring forward as Q3 2021 earnings approaches

“The strength was driven by robust Model 3/Y sales of 232k vs. the Street of 211k, with Model S/X of 9k vs. the Street’s 10k. Total production in the quarter was 238k and was roughly 10k ahead of our and Street estimates,” Ives wrote in the note. “Taking a step back with the chip shortage, a major overhang on the auto space, and logistical issues globally, these numbers combined with this week’s likely earnings beat speaks to an EV demand trajectory that looks quite robust for Tesla heading into 4Q and 2022,” Ives added.

Advertisement

Tesla’s ability to navigate the global chip and semiconductor shortage has continued to astound analysts across the sector. Tesla is one of the few automakers to not have their production output hinder as a result of the chip shortages, which have hindered many automakers’ sales in 2021, driving up the prices of new and used cars this year.

Outside of the U.S., Tesla is also experiencing healthy demand and sales, especially in China. “We believe China demand rebounded in the quarter and is a clear indicator of the step-up in EV demand taking place globally with China leading the way,” Ives wrote. “While there are many competitors in the EV space, Tesla continues to dominate market share as evidenced again this quarter while battling through the chip shortage and now is seeing rebounding China demand after facing headwinds earlier this year.”

Wedbush anticipates China will represent 40%+ of global deliveries for Tesla next year. China is perhaps Tesla’s most crucial region for the longer-term bull thesis, as well as broader EV demand, Ives continued in the note.

Tesla’s Q3 2021 Earnings Call will take place on Wednesday, October 20th, at market close. A Shareholder Deck will first be released, with the Earnings Call with Tesla executives taking place at around 5:30 PM EDT, 2:30 PM PDT.

Ives is ranked 23 out of 7,701 analysts on TipRanks. He holds a $1,000 price target on Tesla stock and a “Buy” position.

Advertisement

Disclosure: Joey Klender is a TSLA Shareholder.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

Advertisement
Comments

Elon Musk

Tesla blacklisted by Swedish pension fund AP7 as it sells entire stake

A Swedish pension fund is offloading its Tesla holdings for good.

Published

on

tesla
(Credit: Tesla)

Tesla shares have been blacklisted by the Swedish pension fund AP7, who said earlier today that it has “verified violations of labor rights in the United States” by the automaker.

The fund ended up selling its entire stake, which was worth around $1.36 billion when it liquidated its holdings in late May. Reuters first reported on AP7’s move.

Other pension and retirement funds have relinquished some of their Tesla holdings due to CEO Elon Musk’s involvement in politics, among other reasons, and although the company’s stock has been a great contributor to growth for many funds over the past decade, these managers are not willing to see past the CEO’s right to free speech.

However, AP7 says the move is related not to Musk’s involvement in government nor his political stances. Instead, the fund said it verified several labor rights violations in the U.S.:

“AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States. Despite several years of dialogue with Tesla, including shareholder proposals in collaboration with other investors, the company has not taken sufficient measures to address the issues.”

Advertisement

Tesla made up about 1 percent of the AP7 Equity Fund, according to a spokesperson. This equated to roughly 13 billion crowns, but the fund’s total assets were about 1,181 billion crowns at the end of May when the Tesla stake was sold off.

Tesla has had its share of labor lawsuits over the past few years, just as any large company deals with at some point or another. There have been claims of restrictions against labor union supporters, including one that Tesla was favored by judges, as they did not want pro-union clothing in the factory. Tesla argued that loose-fitting clothing presented a safety hazard, and the courts agreed.

tesla employee

(Photo: Tesla)

There have also been claims of racism at the Fremont Factory by a former elevator contractor named Owen Diaz. He was awarded a substantial sum of $137m. However, U.S. District Judge William Orrick ruled the $137 million award was excessive, reducing it to $15 million. Diaz rejected this sum.

Another jury awarded Diaz $3.2 million. Diaz’s legal team said this payout was inadequate. He and Tesla ultimately settled for an undisclosed amount.

AP7 did not list any of the current labor violations that it cited as its reason for

Advertisement
Continue Reading

Investor's Corner

xAI targets $5 billion debt offering to fuel company goals

Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

Published

on

(Credit: xAI)

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.

Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.

According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.

Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.

Advertisement

Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.

As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.

Continue Reading

Elon Musk

Tesla tops Cathie Wood’s stock picks, predicts $2,600 surge

Tesla’s future lies beyond cars—with robotaxis, humanoid bots & AI-driven factories. Cathie Wood predicts a 9x surge in 5 years.

Published

on

Cathie Wood shared that Tesla is her top stock pick. During Steven Bartlett’s podcast “The Diary Of A CEO,” the Ark Invest founder highlighted Tesla’s innovative edge, citing its convergence of robotics, energy storage, and AI.

“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wood said of Tesla. She emphasized the company’s potential beyond its current offerings, particularly with its Optimus robots.

“And it’s not stopping with robotaxis; there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” she added.

In June 2024, Ark Invest issued a $2,600 price target for Tesla, which Wood reaffirmed in a March Bloomberg interview, projecting the stock to reach this level within five years. She told Bartlett that Tesla’s Optimus robots would drive productivity gains and create new revenue streams.

Advertisement

Elon Musk echoed Wood’s optimism in a CNBC interview last month.

“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year, beginning this fall. And we expect to scale Optimus up faster than any product, I think, in history to get to millions of units per year as soon as possible,” Musk said.

Tesla’s stock has faced volatility lately, hitting a peak closing price of $479 in December after President Donald Trump’s election win. However, Musk’s involvement with the White House DOGE office triggered protests and boycotts, contributing to a stock decline of over 40% from mid-December highs by March.

The volatility in Tesla stock alarmed investors, who urged Musk to refocus on the company. In a May earnings call, Musk responded, stating he would be “scaling down his involvement with DOGE to focus on Tesla.” Through it all, Cathie Wood and Ark Invest maintained their faith in Tesla. Wood, in particular, predicted that the “brand damage” Tesla experienced earlier this year would not be long term.

Despite recent fluctuations, Wood’s confidence in Tesla underscores its potential to redefine industries through AI and robotics. As Musk shifts his focus back to Tesla, the company’s advancements in Optimus and other innovations could drive it toward Wood’s ambitious $2,600 target, positioning Tesla as a leader in the evolving tech landscape.

Advertisement
Continue Reading

Trending