Thursday 29 January 2015

Bidness Etc - Factors affecting Tesla motors (NASDAQ:TSLA)

During the last several months oil prices have had a great fall, which had a negative impact on the automaker’s capitals. According to a report by Morgan Stanley, there are few regions in which Tesla Motors could confront issues which would eventually allow them to redeem their stance.
Sales of luxury Model S sedan are not likely to suffer due to this issue, however, upcoming Model 3, which has a lower value point, might become the victim of this tyranny.
Another issue Tesla Inc. can face is US dollar volatility, Jonas said. As US dollar strengthens it will affect Tesla because of its exposure to international market. Tesla’s production cost will go up as its production is entirely based in the United States. However, its sales will go down as more than 50% of the automaker's business is situated outside United States.
According to Adam Jonas analyst at Morgan Stanley, if the dollar strengthens by 10% against euro, there would be a adverse impact up to $100 million on Tesla Motors. Since 30% of its volume will arrive from Western side of Europe this year. Thus, Tesla Motors cut $70 million from their working figure during the current year and $20 million from the final quarter.
Jonas has said; “continuous volatility will complement, but for investors who believe in the company, Tesla stock is a worthy choice”.
On Thursday, a better buying opportunity was shown by Tesla Motors.US dollar affecting the stock price of Tesla Motors and the main reasons behind that are decreasing oil prices, sluggish sales in china and stronger, Morgan Stanley brings down its price target on Tesla Motors from stock price of $290 to $280 per share.
Jonas also reported that he had reduced his fourth quarter prediction to 9,993 from 11,165 units. As a result of the whole estimation, it comes to 31,814 units which means more than 1000 units are are there. And just because of lower volume estimate and strengthening of the US dollar, Jonas lowered his estimation regarding gross margin from 29.6% to 28%.
Last week at Detroit Auto show Tesla Motors CEO Elon Musk said, they assume GAAP to be profitable by 2020 in the U.S, however, according to Jonas forecast by the end of 2020, Tesla will earn approximately $1.6 billion in U.S GAAP profit.
The analyst noted that there’s been a shift in emotion are positive on Tesla Motors because of believe that the automaker’s technology will make traditional car engines “outdated” in coming years.

No comments:

Post a Comment