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Goldman Sachs Sees Weak Quarterly Results for Tesla as Shares Continue to Tumble

Stanislav Kogiku/SOPA Images/Shutterstock / Stanislav Kogiku/SOPA Images/Shutterstock

Just days before Tesla is to release its delivery numbers for the quarter, Goldman Sachs analyst Mark Delaney said the firm expects weak second quarter results for the company — despite the company being a “clear beneficiary” of the ongoing EV (electric vehicle) mix shift.

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“We see downside risk to our 261K delivery assumption for 2Q (vs. Visible Alpha consensus at 274K) given recent company comments on challenges ramping in Texas and Berlin, and deliveries could be about in line with buyside consensus at around 250K, in our view,” Delaney wrote in the note sent to GOBankingRates. “The rate of growth in Fremont and degree of recovery in Shanghai in June will be key variables on this front.”

Wedbush Securities analyst Dan Ives also wrote in a note sent to GOBankingRares that, “In a nutshell, while June delivery numbers will be ugly and nothing to write home about, the Street will be focused on the trajectory for 2H and the overall demand picture staying firm.” Ives added that with 40% of deliveries set to come from the Chinese market and production “an absolute disaster in the months of April and May due to the shutdown, we estimate roughly 70k units ultimately got wiped out this quarter from China.”

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However, Wedbush says that Tesla is still on pace “to increase deliveries roughly 50% year-over-year in 2022, an impressive feat that speaks to our strong long term EV demand thesis around the name.” It maintains an Outperform opinion on the stock, with a $1,000 price target.

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As for Goldman Sachs’ Delaney, he added in the note that, “EVs continue to capture share (6% in May 2022 vs. 3% in May 2021, per Motor Intelligence) and demand trends remain strong, which we attribute in part to high gas prices leading to more favorable economics of EV ownership.”

Earlier this week, Tesla laid off 200 employees, many of which are hourly workers. This comes on the heels of CEO Elon Musk saying last week that while the company would reduce its workforce by 10% over the next three months, hourly staff would still be expected to grow, as GOBankingRates previously reported.

And earlier this month, Musk said he had a “super bad feeling” about the economy in an internal email to Tesla execs. At the time he wrote, “Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas. Note, this does not apply to anyone actually building cars, battery packs or installing sloe. Hourly headcount will increase.”

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Shares of Tesla were down 2.9% on the morning of June 30, and are down 44.5% year-to-date.

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