Oppenheimer’s Colin Rusch expects product launch delays as the company has its hands full with various projects
Last week, Tesla Motors Inc. (NASDAQ:TSLA) officially closed its acquisition of SolarCity Corp. (NASDAQ:SCTY) after shareholders both of the companies approved the transaction worth $2.1 billon. Following the report, Oppenheimer updated its thesis on Tesla shares, reiterating its Perform rating today; the firm does not have a price target for the stock.
Colin Rusch, the analyst at the research firm, said that Tesla stock will now track the company’s execution on the production ramp of its more affordable compact sedan, the Model 3, and its price will trade within a range depending on the Model S and Model X quarterly deliveries and gross margins.
He believes that the clean-tech company has its hands full with ambitious production targets, battery and solar production ramp at Gigafactories in Sparks, NV and Buffalo, NY, respectively. Therefore, it would not be surprising for him if Tesla delays launches of its upcoming products, the Model 3 and solar roof “given the magnitude of the company’s agenda.” The investment firm added: “We believe the company is also seeing the beginning of used inventory and what we believe is the challenge of introducing a consumer electronics type product cycle into a durable goods end market.”
Mr. Rusch lifted his loss per share estimate from $2.09 to $2.30 and lowered his revenue forecast from $7.0 billion to $6.8 billion for this year. For the next year, he improved his bottom-line and top-line projections from loss per share of $0.23 to $0.15 and from revenues of $7.7 billion to $9.0 billion. The research firm said that it will continue monitoring Tesla’s solar financing and capital expenditure, as well as expecting “a multi-pronged strategy.”
As of 12:14 PM EST, Tesla shares ticked up 0.65% to trade at $197.93, after rallying about 7% over the last week. Despite such mixed report, Tesla investors remain optimistic after the takeover of the nation’s biggest installer, as they could now see the long-term picture that CEO Elon Musk was trying to show them. Last week, The Country Caller reported that Tesla, along with SolarCity, has completely put an end to the fossil fuel dependence of the Island of Ta’u, deploying a new microgrid project of Powerpacks and solar arrays.