Goldman Sachs believes Tesla Motors Inc Model 3 could boost annual deliveries by 5 times and its event could drive stock, but Q1 deliveries are expected to be an upset for investors
Tesla Motors Inc (NASDAQ:TSLA) expects to deliver 500,000 electric vehicle (EVs) by the end of this decade. Goldman Sachs analyst Katherine Fogertey believes that the company will achieve that milestone through its first mass-market vehicle, the Model 3.
Shares have rallied as much as 70% from its lows since Tesla reported its fourth quarter of fiscal year 2015 (4QFY15) results, in anticipation of the company’s make/break event scheduled for March 31. Ms. Fogertey believes that the event could be a catalyst, since the world will see the vehicle’s design, mileage, and other specifications for the first time at the event.
Goldman Sachs, which rates Tesla stock as a Buy, believes that the Model 3 could drive annual deliveries by 5 times through 2020 which will be enough for Tesla to meet its long-term promise. She stated that this is a key model for Tesla due to its low price tag, which would increase the company’s total addressable market “dramatically” and pump optimistic outlook for sale growth.
Additionally, the EV maker will report its 1QFY15 deliveries during the first week of April. Over the last two quarters, Tesla stock has moved +/- 5% in reaction to quarterly deliveries.
Although the sell-side firm expects the automaker to achieve its outlook for quarterly deliveries for the current quarter, it believes the delivery numbers could potentially be a negative driver for the stock. Tesla had guided to deliver 16,000 by the end of this quarter, compared to 10,000 units delivered in the same period last year.
After opening the market strongly today, Tesla stock has drastically come down again. As of 11:44 PM EDT, the shares were trading down 0.80% at $228.29.