Tesla Deliveries Loom. Wall Street Is No Longer Expecting A Record.

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Analysts are changing their tune on Tesla (TSLA) third-quarter delivery estimates, cutting predictions just days before the EV giant is expected to release quarterly delivery data. Still, Tesla stock edged higher Monday.

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With Tesla likely to report its Q3 deliveries on Monday, Oct. 2, Wall Street is predicting the number will undercut the EV giant’s record-setting 466,140 vehicles in Q2. Since the end of July, analysts had forecast Tesla’s Q3 would outpace the second quarter.

However, that changed Monday with the analyst consensus that Tesla will deliver 461,000 vehicles, down 2% vs. the late July estimate, according to FactSet. Analysts now believe low vehicle inventory due to price reductions, slowing production and consumer interest turning to the new Model 3 and the Cybertruck will take a toll on Q3 deliveries.

Deliveries of the revamped Model 3 in China are expected to begin in Q4 with the vehicle going on sale in Europe in October. Meanwhile, the Cybertruck delivery event has been floated to take place before the end of the year.

Tesla stock, down more than 2% in early action, rebounded to up 0.9% to 247.04 during Monday market action. In September, TSLA is down more than 5%.

Tesla Stock: Analysts Expect Delivery Miss

Expect delivery forecasts to keep coming down, as analysts adjust their figures in the final days. Some recent notes state Tesla’s Q3 deliveries will come in well below 460,000. On Friday, Barclays analyst Dan Levy wrote that he expects Tesla to deliver 455,000 vehicles and production to be 435,000 vehicles, down from 480,000 produced in Q2.

“Underscoring our expectation for a slight miss is that demand remains soft. Of course pricing actions may have helped offset weak demand to some extent, as we saw ongoing price actions in 3Q,” Levy wrote, adding that inventory is likely reduced amid price discounts.

New Street Research analyst Pierre Ferragu added Friday he expects Tesla to deliver 438,000 units, 5% below the consensus view.

“The sequential decline results from production pauses at all of Tesla’s factories over the course of the quarter,” Ferragu wrote.

However, Ferragu sounded an optimistic note.

“Overall, the situation appears stable and underlying trends are heading in the right direction,” he wrote.

“We anticipate a strong sequential improvement for Tesla in the fourth quarter in both deliveries and gross margin,” Ferragu said.

Tesla’s Second-Quarter Deliveries

TSLA reported record global deliveries in early July — as price cuts, tax credits and discounts propelled demand well above Wall Street forecasts.

Tesla deliveries ran to 466,140 in the second quarter, sprinting past Q1’s record 422,875 and Q4’s 405,278. Model 3 and Y deliveries hit 446,915 in Q2. Model S and X deliveries picked up to 19,225. Production hit 479,700, exceeding deliveries once again, even with Tesla curbing output below capacity.

Tesla’s global vehicle inventory was 16 days at the end of the second quarter, up one day sequentially and a 300% increase vs. last year.

Meanwhile, Chief Executive Elon Musk told investors during the Q2 earnings call that the company is targeting 1.8 million vehicles deliveries in 2023. However, Musk also warned third-quarter production will likely “be a little down” due to summer shutdowns for factory upgrades.

Tesla Stock

On Friday Tesla stock dropped more than 4% to 244.88. In total last week, Tesla tumbled nearly 11%, skidding below its 50-day line.

The shares also round-tripped all of the prior week’s gains spurred by the bullish Morgan Stanley call on the EV maker’s supercomputer and self-driving prospects.

Tesla stock has a proper cup-with-handle base, giving it a 278.98 buy point, according to MarketSmith analysis.

Ferragu in his note wrote that a Q3 delivery miss will not be a “positive catalyst” for Tesla stock and that investors may have to wait until Q4.

Meanwhile, analysts maintain that the United Auto Workers strike against Ford (F), General Motors (GM) and Stellantis (STLA) is good news for nonunion Tesla.

Tesla stock ranks sixth in the 35-stock IBD automaker industry group. The S&P 500 component has a 95 Composite Rating out of 99. Shares have an 90 Relative Strength Rating and its EPS Rating is 93 out of 99.

Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.

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