Short-Term TSLA Price Movements - 2014

[FluxCap]

I believe the entire market is up in the pre-market on the back of Japan announcing an expansion of their version of QE - the Nikkei is up something like 4.8%.

Today is likely going to be a monster gap up for the entire market. The Japanese gave us all a very nice gift this morning with over $700billion of stimulus injection. Market shorts are panic covering, and unless news out of France turns sour (smoke from Radio France HQ), I don't see this gap up abating.

U.S. Stock-Index Futures Rise as Japan Expands Stimulus - Bloomberg

 

[pGo]

Panasonic raises profit forecast

Panasonic Raises Profit Forecast as Solar Business Grows - Bloomberg

 

[FluxCap]

Pretty sure traders have gone home. Expecting low volume and flat rest of day.

 

[AlMc]

Pretty sure traders have gone home. Expecting low volume and flat rest of day.

Yes, and the option money makers appear to want $240 as a PT.

 

[Derek Vinyard]

Stifel cuts his EPS to ($0.03) and thinks TM will miss the 35'000 deliveries. Well, we'll see.

Stifel is out with a Q3 preview for Tesla Motors (Nasdaq: TSLA), which is expected out on November 5th after markets close. The firm has Tesla at Buy with a price target of $400.Analyst James Albertine is cutting his EPS estimate from $0.04 to a loss of $0.03 per share. The Street is looking for a breakeven result.
Albertine noted that the cut outlook stems from a roughly $9 to $10 million headwind related to retroactive drivetrain warranty expenses incurred during the quarter, which equates to a roughly $0.07 negative EPS impact.
We also believe short-term production/delivery guidance may fall short of expectations, given two weeks lost during 3Q14 for a Model X body assembly line changeover, and vehicle-in-transit headwinds as TSLA works to fill international demand. That said, we think the focus should remain on the timing of TSLA's progression up to and beyond 1,000 units produced/week, order backlog for the Model X, and ATP trajectory in light of recent feature announcements, Albertine noted.
Albertine's FY14 EPS target is cut from $1.15 to $0.96 with expectations that the company will miss its 35,000 unit delivery target for 2014. The analyst continued, We see upside to our model in the form of greater than expected operating leverage from higher ATPs driven by recent feature announcements (all-wheel drive, dual motors, semi-autonomous technologies), as well as secondary market opportunities for existing Model S vehicles in light of 3 to 4 month order backlogs in North America.
For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.
Tesla Motors closed at $238.66 yesterday.

 

[vgrinshpun]

Stifel issues pre-ER note:

Stifel is out with a Q3 preview for Tesla Motors (Nasdaq: TSLA), which is expected out on November 5th after markets close. The firm has Tesla at Buy with a price target of $400.
Analyst James Albertine is cutting his EPS estimate from $0.04 to a loss of $0.03 per share. The Street is looking for a breakeven result.
Albertine noted that the cut outlook stems from a roughly $9 to $10 million headwind related to retroactive drivetrain warranty expenses incurred during the quarter, which equates to a roughly $0.07 negative EPS impact.
We also believe short-term production/delivery guidance may fall short of expectations, given two weeks lost during 3Q14 for a Model X body assembly line changeover, and vehicle-in-transit headwinds as TSLA works to fill international demand. That said, we think the focus should remain on the timing of TSLA's progression up to and beyond 1,000 units produced/week, order backlog for the Model X, and ATP trajectory in light of recent feature announcements, Albertine noted.
Albertine's FY14 EPS target is cut from $1.15 to $0.96 with expectations that the company will miss its 35,000 unit delivery target for 2014. The analyst continued, We see upside to our model in the form of greater than expected operating leverage from higher ATPs driven by recent feature announcements (all-wheel drive, dual motors, semi-autonomous technologies), as well as secondary market opportunities for existing Model S vehicles in light of 3 to 4 month order backlogs in North America.

http://www.streetinsider.com/Analys...from+Drivetrain+Warranty+Expense/9962695.html

_______________________________________________________

Update

Ha, Derek beat me with posting this.
Looks like market is reacting to Stifel's expectation that 2014 35,000 car guidance will not be met...

 

[Derek Vinyard]

Stifel issues pre-ER note:



http://www.streetinsider.com/Analys...from+Drivetrain+Warranty+Expense/9962695.html

_______________________________________________________

Update

Ha, Derek beat me with posting this.
Looks like market is reacting to Stifel's expectation that 2014 35,000 car guidance will not be met...

as long as TM will beat the market next Wed, I'm fine:smile:

the phenomenon with TSLA pre and post earnings is well explained here:
http://www.forbes.com/sites/greatspeculations/2014/10/31/teslas-unusual-risk-over-upcoming-earnings/

 

[Larken]

Stifel issues pre-ER note:



http://www.streetinsider.com/Analys...from+Drivetrain+Warranty+Expense/9962695.html

_______________________________________________________

Update

Ha, Derek beat me with posting this.
Looks like market is reacting to Stifel's expectation that 2014 35,000 car guidance will not be met...

Great. I'm 100% sure Tesla will meet and exceed their FY guidance and the more analysts doubt Teslas ability to achieve this, the harder it will explode in their face when Tesla reports in February. And I don't think their negative outlook has the ability to move the stock down as much as it can move the stock up if they are proven wrong. Or, if I put it this way, I'd rather the analysts are skeptical than them expecting Tesla to beat their own guidance since that might set TSLA holder up for a Q3 '13 repeat.

 

[vgrinshpun]

as long as TM will beat the market next Wed, I'm fine:smile:

the phenomenon with TSLA pre and post earnings is well explained here:
http://www.forbes.com/sites/greatspeculations/2014/10/31/teslas-unusual-risk-over-upcoming-earnings/

I've played with numbers in my spreadsheet tracking TM deliveries in 2013 and 2014, using Elon's tweet about 65% Y-O-Y deliveries in September. Based on prior delivery numbers, it is almost impossible for TM to miss the 7,800 guidance. They will most likely beat the guidance by several hundred cars.

 

[ibcs]

The question is be if they do beat by several hundred will the stock get hammered for not beating it by 1000 cars. Very difficult to gauge the stock reaction when positive.

 

[RobStark]

It will be interesting to see how the independent shop market evolves for EVs generally and for Teslas specifically. Certainly Tesla's current position that it won't make parts generally available would seem to put a damper on development of those shops.

Perhaps you're right about remanufacturing battery packs, but without Tesla's support it sounds like there are some pretty big barriers to doing that on a large scale. Will Tesla support a car with a remanufactured battery pack? I'm guessing the answer (at least right now) is no.

There have always been a right to repair at a shop of your choosing without voiding manufacture warranties but those laws have been strengthened in the information age giving access to the diagnostic tools and codes necessary to work on vehicle computers to independent shops.

Automakers agree to 'right to repair' deal

http://www.autonews.com/article/20140125/RETAIL05/301279936/automakers-agree-to-right-to-repair-deal

 

[chickensevil]

The question is be if they do beat by several hundred will the stock get hammered for not beating it by 1000 cars. Very difficult to gauge the stock reaction when positive.

I would hope that noone would pick up on that kind of a number since that is a huge overshoot of their numbers and would set the bar of expectation way too high.

 

[ibcs]

The number was arbitrary I'm just pointing out with a beat sometimes the stock gets punished because of expectations out of sink with reality.

 

[JST]

There have always been a right to repair at a shop of your choosing without voiding manufacture warranties but those laws have been strengthened in the information age giving access to the diagnostic tools and codes necessary to work on vehicle computers to independent shops.

Automakers agree to 'right to repair' deal

http://www.autonews.com/article/20140125/RETAIL05/301279936/automakers-agree-to-right-to-repair-deal

I am far from an expert on this, but some quick research suggests that the Massachusetts Right to Repair legislation--and the nationwide settlement to which it led, memorialized in the linked Memorandum of Understanding--only applies to companies with franchised dealers.

https://www.globalautomakers.org/sites/default/files/document/attachments/SignedR2RMOUAgreement.pdf

 

[justthateasy]

The number was arbitrary I'm just pointing out with a beat sometimes the stock gets punished because of expectations out of sink with reality.

The bigger question how much of a sink can we expect to see if Tesla reports beating estimates but "not enough" according to the street?

Also, TSLA is technically trading flat. If it wasn't for that WSJ false report and Elon's tweet coming to the rescue, we're at the range we can expect to be at otherwise.

I'm just hoping it's not a NFLX type of implosion on Wednesday.

 

[Causalien]

All gaps will be closed. All hail the god of gaps.

 

[Johan]

All gaps will be closed. All hail the god of gaps.

Dude, there are some gaps below $100 that I don't ever hope get filled. No matter if it's God or Belzebub who's in charge...

By the way I had some of the maple syrup you gave me with pancakes. D-lisciuos!

 

[32no]

The question is be if they do beat by several hundred will the stock get hammered for not beating it by 1000 cars. Very difficult to gauge the stock reaction when positive.

The stock will not get hammered if it doesn't beat the guidance by 1000 cars. The street still thinks Tesla is barely making 7800, and that they will not make 35,000 for the year, as well as an average EPS estimate of -$0.01. The day after the Barclays note of the potential beat, the stock didn't react at all, and in fact, it went down, which means that expectation wasn't priced in at all.

Tesla will probably beat guidance, will definitely make a profit (especially with the extra ZEV credits they sold this quarter, which is $30-$40 million according to mostapasta), and of course will reaffirm guidance of 35,000. This should give a strong upward trend to the stock.

 

[FANGO]

Hopefully they give next year guidance too. That seems to be a large part of why people reacted negatively last year.

 

[Johan]

Hopefully they give next year guidance too. That seems to be a large part of why people reacted negatively last year.

Indeed. I'm hoping for some long term vision mentioned too, something along the lines of doubling times and 1 Gigafactory now, 2 in 3 years, 4 in 6 years etc. 500k/year production in 2017. Things like that, things that we here understand and know, things that are obviously part of the game plan (the not-so-secret master plan). I just think that saying the words with confidence during an ER would just make it a bit more real to the broader market and would, if coupled with quarterly goals being reached, good near horizon guidance and no severe delays with regards to MX, create quite the rally in the week following the call.