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Wall Street split on Tesla 2019 delivery promises

Kitco News

(Reuters) - Tesla Inc shares rose almost 3% in early trade on Wednesday, with analysts still divided on the electric-car maker’s chances of meeting delivery and production targets in the months ahead, after comments by Chief Executive Officer Elon Musk at an annual shareholder meeting.

Musk told shareholders on Tuesday that Tesla was on track to hit its volume production goal for the end of this year and had “a decent shot at a record quarter on every level”.

A 31% fall in first-quarter deliveries stirred concern among investors over the appetite for Tesla’s Model 3 sedans and its cashflow as it invests to ramp-up output and get cars out to customers on time.

Tesla has said previously it plans to deliver 90,000 to 100,000 vehicles to customers in the second quarter, up from 63,000 vehicles in the first. Musk said it was on course to deliver a targeted 360,000 to 400,000 vehicles in 2019.

Baird analyst Ben Kallo, rated four out of five stars for his accuracy on estimates for Tesla, believes “bear arguments will be disproven in the coming weeks and months”.

He also expects the carmaker, which witnessed steady demand over the past few weeks, to be cash flow positive in the second quarter.

At least eight Wall Street brokerages cut their price target for Tesla in May to an average of $280.31 a share, according to Refinitiv data. Shares of the company have fallen by around $120 so far this year and were trading at around $222 in trading before the bell on Wednesday.

Of the 31 analysts who cover the stock, only 12 now recommend buying Tesla shares, while another 12 have a “sell” rating.

Wedbush analyst Daniel Ives said that achieving the “aggressive target” for 2019 was a Herculean task. He rates the stock “neutral”, with a price target of $230.

Reporting by Tanvi Mehta in Bengaluru; Editing by Arun Koyyur

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