The Delivery Report Poses the Greatest Risks to Tesla Stock

The Delivery Report Poses the Greatest Risks to Tesla Stock

Instead, they should ponder stale first-quarter delivery estimates from the Street. That is a bigger risk to the stock—for the next couple of weeks anyway.

Tesla

is due to report first-quarter deliveries on April 2. Wall Street is looking for just under 480,000 units, according to estimates aggregated by Bloomberg and

FactSet
,

up from 423,000 delivered in the first quarter of 2023.

Tesla isn’t going to come close to hitting 480,000.

“The Street is notoriously late at updating numbers,” says


Future Fund Active ETF

co-founder, and Tesla shareholder, Gary Black.

To avoid nasty surprises, investors should look at more recent estimates, updated in the past couple of weeks. They average out to about 430,000 units, down from an average of about 465,000.

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The stale estimate problem always looms large for investors and is how Wall Street’s so-called whisper numbers get created.

Whisper numbers are, essentially, the unofficial Wall Street consensus. When a stock goes up after an earnings miss some will point out the company beat the whisper number. Another way to say that is the company beat fresher estimates.

Tesla delivered about 435,000 units in the third quarter of 2023, while Wall Street was looking for about 455,000 units. Shares gained 0.6% on the day of the release. Tesla had met the whisper number of 435,000 units. That was the level the more recent estimates predicted Tesla would hit.

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Of course, another reason Tesla stock gained on the apparent third-quarter delivery “miss” is that the stock market is forward-looking. Tesla stock was down almost 10% in the two weeks leading into the report.

Tesla has been weak recently, too. Shares started March above $200.

“You had all these people taking down numbers,” says Black when explaining recent stock price performance. For the first quarter, he’s looking for a number between 430,000 and 440,000 units.

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As for where the stock might go after the report, a true miss would take shares down to recent support, around $164, says Fairlead Strategies founder, and market technician, Katie Stockton.

Market technicians aren’t making fundamental calls on a stock. They look at charts to get a sense of investor behavior. Support represents levels investors have stepped in and bought stock in the past. Resistance represents levels where investors have sold stock.

A good delivery print could send shares to about $177, near recent resistance, she adds.

After the delivery report will come Tesla’s first-quarter earnings report and conference call. That is when investors will want to hear what CEO Elon Musk has to say about EV demand, pricing, and competition for the remainder of 2024.

Through Tuesday trading, Tesla stock was down about 31% year to date. The


S&P 500

and

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Nasdaq Composite

were up about 9% and 8%, respectively. It is the worst start to a year for Tesla stock ever.

Write to Al Root at allen.root@dowjones.com

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