Tesla Analyst Tells Why Q2 Margin Shrinkage Shouldn't Be A Issue For The Stock: 'The Long-Term Question Is...'
Portfolio Pulse from Shanthi Rexaline
Tesla is set to report its Q2 results, with analysts expecting a YoY rise in EPS from $0.76 to $0.82 and a 44.50% jump in revenue to $24.48 billion. Despite concerns over auto gross margin shrinkage due to price cuts and discounts, Gene Munster, Managing Partner at Deepwater Asset Management, is not overly concerned. He expects margins to improve in the latter half of the year and into 2024, particularly as Tesla ramps up production at Giga Austin and the 4680 battery, and lithium prices decrease. Munster also noted that traditional automakers are struggling with their EV margins, citing Ford's EV division's 40% loss and Polestar's 45% loss, compared to Tesla's 15% operating margin.
July 19, 2023 | 6:48 am
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NEGATIVE IMPACT
Ford's EV division is losing 40% on the margin front, according to Gene Munster, Managing Partner at Deepwater Asset Management.
The news mentions Ford's struggles with its EV division's margins, which is likely to have a negative impact on the stock in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Polestar Automotive is losing about 45% on the margin front, according to Gene Munster, Managing Partner at Deepwater Asset Management.
The news mentions Polestar's struggles with its margins, which is likely to have a negative impact on the stock in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Despite concerns over Tesla's Q2 auto gross margin, analyst Gene Munster expects improvement in H2 and into 2024. He notes traditional automakers' struggle with EV margins, with Ford and Polestar losing 40% and 45% respectively, compared to Tesla's 15% operating margin.
The news is directly related to Tesla's upcoming Q2 results and the company's future prospects. The positive outlook from the analyst, despite concerns over auto gross margin, is likely to have a positive impact on the stock in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100