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GOLDMAN SACHS: Tesla may fall 'well short' on its first-quarter deliveries (TSLA)

Kimberly Chin
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  • A Goldman Sachs analyst believes Tesla will miss its guidance for Model S and Model X vehicle deliveries, and fall well below consensus estimates for its Model 3 deliveries, in the first quarter of 2018.
  • The electric automaker has dealt with production bottlenecks, mainly due to difficulties around producing battery modules for its vehicles in a timely matter. 
  • The analyst maintained a "Sell" rating and price target of $205 per share.
  • Shares of Tesla's slipped around 1.5%.

Tesla and its larger-than-life CEO, Elon Musk, have been known for setting ambitious goals and striving, although frequently failing, to meet those objectives. 

That is why a Goldman Sachs analyst doubts the electric-vehicle company will reach its projections for vehicle deliveries in the first quarter of 2018.

"We believe the company is tracking below its 2018 Model S/X guidance of approx. 100k units (an implied 25,000 per quarter)," wrote David Tamberrino, a Goldman Sachs analyst, in a note to clients.

"Further, while monthly Model 3 deliveries are showing sequential improvement, we estimate that they will fall well short of consensus expectations."

Tesla's stock teetered following the analyst's rebuke. It was trading down 1.95% at $315.09 per share Monday.

Tamberrino has analyzed the number of vehicle registrations as well as estimates to come to this conclusion. Tesla's weekly production rates for the Model 3, its first mass-market electric car, as indicated by the number of vehicle registrations, was "tracking below the ramp necessary" for the company to meet its first-quarter goal, Tamberrino said.

Here's a breakdown of his projections:

  • Model 3: Tesla projects the company will have a run-rate of 2,500 Model 3 vehicles per week in the first quarter, but Tamberrino estimates it will end the quarter with 9,500 vehicles, which is below its guidance. Tamberrino also believes that, at its current clip, the company will only make 7,000 deliveries for the first quarter, far below FactSet consensus estimates of 13,800 deliveries.
  • Model S/X: The automaker has given guidance that it will deliver 100,000 Model S and X units in 2018. Tamberrino estimates the company will only deliver 22,000 units, or 11,000 of each vehicle in the first quarter and 8% below the 24,000 vehicles Goldman previously estimated.

Though the analyst admitted that the first quarter was usually "seasonally softer," he also noted the company's weak fourth-quarter 2017 production as the company has struggled to make enough batteries for the Model 3. Tesla has even resulted to making batteries by hand to wiggle itself out of its production bottlenecks, CNBC reported.

Tamberrino also attributed the company's missed production targets to the fact that it hastily rushed to sell its inventory in the second half of 2017 by offering showroom discounts and lowering interest rates, according to industry trade pub Electrek. That has led to the massive delays in fulfilling the thousands of Tesla now on back order for the vehicles.

Tamberrino maintained his "Sell" rating and sixth-month price target of $205 per share.

Tesla's shares were down 1.03% for the year.

You can view Tesla's stock price here.

Read more about Tesla's further struggles with executives leaving the company.

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