On Thursday, Goldman Sachs reaffirmed its Neutral stance on Tesla (NASDAQ:TSLA) stock, sustaining a $230.00 price target. The firm's analysis followed Tesla's announcement of its third-quarter vehicle deliveries and production numbers.
The electric vehicle manufacturer reported approximately 463,000 deliveries, marking a 4% increase from the previous quarter and a 6% rise year-over-year. Production figures were also strong, with around 470,000 vehicles produced, up 9% from the same period last year.
Tesla's delivery numbers for the third quarter were largely anticipated, closely aligning with the Visible Alpha Consensus forecast of 461,000 and Goldman Sachs' own estimate of 460,000. The delivery figures came amid high expectations, particularly due to robust performance in China as suggested by recent insurance data. Nonetheless, the anticipated growth in China was somewhat dampened by a softer market in Europe.
The analyst noted that investor attention is likely to pivot to several upcoming developments. These include the "We, Robot" event scheduled for October 10, future vehicle delivery volumes, and the potential for increased deliveries in 2025 with a refreshed Model Y and a new, more affordable model.
Additionally, investors are keeping a close eye on Tesla's automotive non-GAAP gross margins to determine if they have reached a low point, as well as the Energy segment's performance, which saw a sequential dip in storage deployments but a significant year-over-year increase.
Tesla's recent production and delivery figures indicate a steady growth trajectory for the company. As the market anticipates the forthcoming "We, Robot" event and further updates on Tesla's product lineup and financial health, the company's stock remains under the close watch of investors and analysts alike. Goldman Sachs' current assessment reflects a cautious but watchful approach to Tesla's stock, pending these future developments and their impact on the company's performance.
In other recent news, Tesla has discontinued its most affordable Model 3 variant in the U.S., now offering the Model 3 Long Range Rear-Wheel Drive as its entry-level electric vehicle at $42,490. This development follows increased tariffs on Chinese goods, affecting the previously offered model's lithium iron phosphate battery cells. Meanwhile, Tesla's third-quarter delivery results fell short of expectations, despite the company's various incentives and financing offers.
In response to the delivery results, several analyst firms have revised their outlooks. Truist Securities raised its price target for Tesla to $236, maintaining a Hold rating. Bernstein SocGen Group kept its Underperform rating and a $120 price target, expressing doubt about Tesla's growth prospects. TD Cowen also held steady with a Hold rating and a $180 price target, while Stifel maintained its Buy rating with a $265 price target.
In terms of earnings, Evercore projects Tesla's earnings per share to range between 57 to 59 cents. As for other company news, Tesla recently won a dismissal of a shareholder lawsuit over self-driving technology claims and saw an increase in its market share in Sweden to 8.5% in 2024. These are among the recent developments in Tesla's journey.
InvestingPro Insights
To complement Goldman Sachs' analysis of Tesla's recent performance and future outlook, InvestingPro data provides additional context for investors. Tesla's market capitalization stands at an impressive $795.53 billion, reflecting its dominant position in the electric vehicle market. The company's P/E ratio of 63.97 indicates that investors are pricing in significant future growth, aligning with the anticipation surrounding upcoming developments like the "We, Robot" event and potential new vehicle models.
InvestingPro Tips highlight Tesla's financial strength, noting that the company "holds more cash than debt on its balance sheet" and that "cash flows can sufficiently cover interest payments." These factors support Tesla's ability to invest in future growth initiatives, such as the refreshed Model Y and the more affordable model mentioned in the article.
However, investors should be aware that Tesla is "trading at a high earnings multiple" and has a "high P/E ratio relative to near-term earnings growth." This valuation premium underscores the importance of the company delivering on growth expectations, particularly in light of the anticipated increase in deliveries for 2025.
For those seeking a more comprehensive analysis, InvestingPro offers 15 additional tips on Tesla, providing a deeper understanding of the company's financial position and market performance.
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