Ahead Of Tesla's Q2 Results, Analyst Says To Brace For Short-Term Margin Disappointment But 'Also A Good Recovery Beyond'
Portfolio Pulse from Shanthi Rexaline
Ahead of Tesla's Q2 results, New Street Research analyst Pierre Ferragu warns of short-term margin disappointment due to the discounts offered by the company during the quarter. However, he also predicts a good recovery beyond Q2. Tesla's aggressive pricing has kept the company on track to grow annual deliveries by 50%, but this has driven margins down from 30% to 18.34% in Q1. Ferragu expects gross margins to slide a further 270 basis points to 15.6% in Q2. Despite this, he sees margins bottoming in Q2 and recovering afterwards, with auto gross margins expected to be at 25% in the long run.
July 16, 2023 | 1:52 pm
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Tesla's aggressive pricing strategy to grow annual deliveries by 50% has led to a decrease in margins, with further slide expected in Q2. However, recovery is expected beyond Q2, with long-term auto gross margins predicted to be at 25%.
The aggressive pricing strategy adopted by Tesla to boost annual deliveries has led to a decrease in margins. This trend is expected to continue in Q2, leading to a short-term disappointment. However, the analyst predicts a recovery beyond Q2, with long-term auto gross margins expected to be at 25%. This news is highly relevant to Tesla and important for investors as it directly impacts the company's profitability.
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