To The Moon

$Tesla Motors(TSLA)$ 's Q2 delivery data is about to be released, and many institutions have lowered their delivery expectations. What impact will happen to the market? 

All four China EV makers $Li Auto(LI)$ ,$XPeng Inc.(XPEV)$ ,$NIO Inc.(NIO)$ are likely to report sales Friday, July 1. , Chinese EV and battery giant $BYD Co., Ltd.(BYDDF)$ are expected to report Q2 delivery numbers on July 2 or 3,  $Tesla Motors(TSLA)$ reports global Q2 production and deliveries around the same time.

1. Citi Research, FactSet, Deutsche Bank, Morgan Stanley Analysts Trims Tesla's Q2 Dilivery.

Latest news，Citi trims $Tesla Motors(TSLA)$ estimates as Wall Street tempers Q2 expectations. 

As approaches the end of the second quarter, Citi Research analyst Itay Michaeli has cut his forecasts for the company in a note on Tuesday evening.

The Citi analyst updated his model to reflect headwinds from Tesla’s business in China. Tesla China’s pace was disrupted by a substantial margin in the Q2 due to the country’s strict Covid-19 lockdowns. The lockdowns caused Giga Shanghai to halt vehicle production for over 3 weeks.

Overall, Citi now expects Tesla to deliver a total of 258.5K vehicles for Q2 2022 and about 1.42 million for the whole year. Michaeli also expects auto gross margin ex. credits to reach 26.5% in Q2 and 29.5% for the whole year.

The Citi analyst lowered his 2022 EPS estimate by about 2% due to the challenges faced by the EV maker in the second quarter.

Source from google

Analysts polled by FactSet on average expect Tesla to deliver 265,000 vehicles in Q2, with forecasts ranging from Deutsche Bank's 245,000 and RBC Capital's 249,000 to a high of 277,000 from Wedbush Securities.

Deutsche Bank analyst Emmanuel Rosner also cut his Q2 estimate for Tesla to 245k units.

Earlier this month, Morgan Stanley analyst Adam Jonas also reined in his estimates for Tesla’s second quarter results to 270k vehicles. His previous estimate for Tesla’s Q2 2022 vehicle deliveries was an optimistic 316k units.

Jonas reports in a recent research note, Musk is trying to "rally" his "troops" at Tesla to make a big push delivering electric cars this month, in an effort to hit analyst targets for deliveries before the second quarter wraps up.

We have also seen that the lockdown situation in Shanghai has indeed put pressure on Musk, so much so that he sent an email to stress that innovation cannot be achieved by phone calls, saying that the requirement to be on duty for 40 hours is "more difficult than we would expect."

2. Why Shanghai Plant Q2 Data Matters？

It is entirely understandable that a big push at the end of Q2 would both be standard operating procedure for Tesla, and also considering how far behind production quotas the company probably is, after a weeks-long, Covid-inspired shutdown of Tesla's Shanghai gigafactory in China.

As 40% of Teslas produced globally are produced right there at that Shanghai plant, and China accounts for "well over 50%" of the profit Tesla earns in an average quarter.

The EV maker opened its Austin, Texas, factory in April, right after launching production at its Berlin plant in late March. Tesla had expected a slow ramp-up in production, with the Berlin facility in particular not entirely finished. But even so, output has been light.

Souce from forbes.com

CEO Elon Musk recently said in a recently released video interview with Tesla Owners of Silicon Valley on May 31 that the two new factories were losing billions of dollars due to battery shortages and supply disruptions from China.

The Shanghai factory has been producing 17,000 Model 3 and Model Y vehicles each week since mid June, Reuters reported.

Thus, the upcoming Q2 delivery numbers might really be critical! 

Morgan Stanley also noted that Tesla's 'Very Tough' Q2 could result in strong Q3 recovery. 

Some comment followed that a new high will happen by years' end, as Shanghai, Berlin and Austin all will all ramping like crazy, then Q3 and Q4 are going to have astounding results.

Do you believe so? do you still a stonger believer of Tesla?

As of date, $Tesla Motors(TSLA)$ stock has corrected by more than 40% lately, it has down 37% in Q2--on track for its worst quarter ON RECORD, is it finally the time to buy the stock?

Tesla has not been a cheap stock of late. In the last two years, the company price-to-sales ratio (PS) has traded between 6X and 30X . At $711, the stock sells at a PS ratio of 12.9X. Tesla stock has traded as low as 1.4X and averaged 9.9X PS ratios, respectively, in the last 5years. At today's 12.9X PS ratio valuation, Tesla stock is still trading above its 5-year average.

if we then compare Tesla's valuation to that of its peers, for example, $Ford(F)$ , Tesla seems to be on a different planet altogether. Ford's PS, price-to-book (PB), and price-to-earnings (PE) ratios are 0.3, 1.0, and 4.0. Comparatively, Tesla's ratios are 12.9, 21.6, and 96.2.

Though Tesla stock is cheap today compared to its prices for the last 2 years, it is by no means cheap relative to its extended history and peer.

3. Institutions's Expecations in Tesla Stock Price and forcast on other four China EV makers

Morgan Stanley Jonas still rates Tesla stock an Overweight (i.e. Buy) with a $1,300 price target.

According to MarketSmith chart analysis, shares are in a long consolidation with a $1,208.10 buy point, TSLA stock is trading below its slumping 50-day line and is 45% below its 52-week high of $1,243.49.

Overall, there’s a positive feeling on Wall Street about TSLA, along with some caution. The Moderate Buy consensus rating is based on 30 analyst reviews that include 16 Buys, 8 Holds, and 6 Sells. The average price target of $917.10 suggests an upside of ~34% from the current trading price of $683.

Souce from tipranks.com

MarketWatch reported that Mizuho analyst Vijay Rakesh cut price targets for $(Tesla)$, $(Nio)$ and $(Rivian)$, citing lingering effects of supply constraints and Covid-related shutdowns in China.

$NIO Inc.(NIO)$ delivered 5,074 EVs in April and 7,024 in May. It has forecast Q2 deliveries of 23,000-25,000 electric vehicles, up 5%-14% from the year-ago quarter, but down from Q1's 25,768 EV deliveries. 

$XPeng Inc.(XPEV)$ announcedits vehicle delivery results for May 2022 wherein it delivered 10,125 Smart EVs in May 2022 (+78% Y/Y), up 12.5% M/M.

$Li Auto(LI)$ June deliveriesrose 166% Y/Y and 176% M/M to 11,496, whileNIO reportedJune deliveriesof 7,024, up 38% M/M and 4.7% Y/Y.

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