Yesterday evening Goldman Sachs reaffirmed its sell rating for Tesla (TSLA: $335, flat yesterday and down $6 today), predicting Model 3 production will be slower than expected. In the third quarter, Tesla delivered 26,100 total vehicles and 220 Model 3 cars versus the Street estimate of 25,850 and 1,250 respectively. Goldman went on to make a big deal about the miss on the Model 3, and ignoring the beat on the total number of cars delivered.
Tesla had previously said it wanted to produce 1,500 Model 3s in September and 20,000 a month by the end of the year. The company has around 450,000 pre-orders for the vehicle, and because of this unprecedented back order, ordering a new Model 3 today would be delivered in 2018 or 2019. The Street doesn’t think this 20,000-a-month number will be met by the end of the year and we agree.
Goldman increased its six-month price target for the stock to $210 from $200. (This is not a misprint.) Are you serious?
The stock is up 59% this year versus the S&P 500's 13% return.
BMR Take: Are you serious Goldman? Oh – we said that above. Hmmmm. Listen, we have said over and over that this is a very speculative investment and it can either drop to $200 or shoot to $500. But give the company a little slack, please. They are just getting going. And have you ever talked to a Tesla owner? They are all ecstatic. They LOVE their cars. Kind of like the Apple iPhone when it was first delivered 10 years ago. And look what happened to Apple. Need we say more?