Tesla has been questioned by the market for declining deliveries in the past few days, and analysts have begun to update their attitudes on the company's stock price this week.
On Tuesday, UBS cut its 12-month price target for Tesla shares to $266 from $290. Just a month ago, the firm raised its price target on Tesla's stock to $290 from $270.
On the same day, Jeffery also lowered his price target on Tesla's stock, from $265 to $250. The firm also expects Tesla to report third-quarter revenue of $23.87 billion and earnings per share of 64 cents.
Tesla will report third-quarter earnings and revenue next Wednesday (Oct. 18). With recent delivery figures well below Wall Street expectations, many analysts have begun to scale back their optimism.
Wall Street consensus is for Tesla to post third-quarter earnings of 74 cents per share on $24.32 billion in revenue, according to FactSet. In the second quarter, Tesla posted revenue of $24.927 billion and earnings per share of 78 cents.
Capacity and demand are in doubt
Last week, Tesla announced that it delivered 435,059 vehicles in the third quarter, down 6% from the second quarter. Tesla officially explained that the decline in deliveries was due to the shutdown of some production capacity due to the upgrading of some key facilities by Tesla.
However, many analysts believe that Tesla's delivery decline is more likely to be affected by weak demand.
According to data released by the China Passenger Federation on Monday, Tesla sold 74,000 Chinese-made electric vehicles in September, including exports, down 10.9 percent from a year earlier. At the same time, local manufacturer BYD saw deliveries rise 42.8 per cent year on year to 287,000 vehicles in September.
On the other hand, Tesla last week again cut the starting price of its Model 3 and Model Y vehicles in North America, wiping out almost all the gains made since the beginning of 2021. This has to be reminiscent of the strategy of "price reduction promotion".
On Monday, Wells Fargo noted that Tesla needs to deliver about 475,000 vehicles in the fourth quarter to meet its annual target of 1.8 million deliveries, which relies on revamped Model 3 and Cybertruck from its Chinese factory. But apparently Wells Fargo isn't too bullish on that prospect.
Wells Fargo cut its 12-month target for Tesla shares to 260 from 265 and expects gross margins to fall to 16.3% in the third quarter and further weakness in the fourth quarter.
However, some believe that Model 3 sales in China will rebound in the fourth quarter, and the Cybertruck will be launched smoothly to push forward the annual delivery target. On Monday, Morgan Stanley also released a report saying that electric cars will be integrated with smartphones, but whether this idea can be implemented needs to let the bullets fly.