Tesla (TSLA): 3 Reasons Tesla's Numbers Weren't Clean - JPMorgan

JPMorgan analyst, Ryan Brinkman, reiterated his Underweight rating on shares of Tesla Motors (NASDAQ: TSLA) and raised his price target to $190 from $185 after the company reported earnings and maintained its outlook for Model 3 production. The analyst believes this "provides relief for the bulls, as this has been the most closely watched performance metric and one which Tesla has repeatedly been pushing out".

The analyst does not think the outlook is good enough to materially change its overall profile for several reasons:

1) Maintaining Model 3 production is a positive but Tesla had significantly slashed its outlook as recently as January 3. The analyst believes that most investors had already incorporated a reiteration of the already reduced launch timing in their baseline assumptions.

2) free cash flow tracked substantially better, at -$0.3 bn vs. expectations for -$0.9 bn and was much
improved sequentially vs. 3Q17’s record -$1.4 bn outflow but a significant driver of the sequentially
improved cash generation was a one-time draw-down of finished goods inventory that is likely to prove unsustainable

3) Automotive gross margin ex-ZEV credits tracked 13.8% below Tesla’s expectation and management attributed the shortfall to the softer Model 3 deliveries than were expected at the time of 3Q17 earnings

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $345.00 yesterday.

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