ZINGER KEY POINTS
- Tesla's June quarter deliveries could be in-line or slightly miss estimates.
- Tesla, though seeing a slight hit in the near term, could bounce big once consumer spending stabilizes.
Tesla, Inc. chief executive officer Elon Musk created a furor this week by communicating to employees his intent to slash 10% of salaried jobs at the company. He blamed the proposed action on the economy.
Tesla analyst and Loup Funds co-founder Gene Munster offered his take on the development.
Tesla Not Immune to Recession: Musk's comments about job cuts suggests a recession would have a "small negative" effect on Tesla, Munster said. The analyst noted that there are already signs of a dip in the broader U.S. auto market.
Honda Motor Company's U.S. sales were down 36% in May, steeper than the 15% drop in the March quarter and the 20% fall in the December quarter, he said.
Tesla Could Be Least Impacted: Munster expects a negative impact on Tesla in June. "It likely won't be as bad as investors are fearing today," he said.
The analyst noted that the company has outgrown the broader U.S. car market deliveries by more than 70% over the past two years. If this gap is preserved and if traditional automakers see a 35% drop for the June quarter, Tesla will likely see a growth rate of 35%, the analyst said.
This would mean that Tesla's performance in the quarter will be "in-line" to "slight miss" from expectations for about 40% growth, he added.
"Big picture, Tesla has the right price and feature combo consumers want," Munster said.
"While being impacted in the near-term, their deliveries should bounce back once the consumer stabilizes."
Tesla closed Friday's session down 9.22% at $703.55, according to Benzinga Pro.
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