The boutique investment bank also reiterated its Outperform rating saying demand pessimism was overblown and “sentiment should improve into first quarter Deliveries.”
“We think investor pessimism on Model 3 demand is overblown and weak Q1 deliveries (due to timing) are priced into the stock at current levels,” wrote Ben Kallo and David Katter in a note to clients.
“While it is unclear what Tesla may announce today ($35k Model 3 introduction, autonomy update, or something entirely different), we think it could serve as a catalyst to improve sentiment and drive shares higher. Regardless, we believe demand concerns are overblown and expect the stock to trade higher into the Q1 delivery release,” they added.
The Securities and Exchange Commission asked chief executive and founder Elon Musk be held in contempt after he tweeted Wednesday about "some Tesla news" that will be unveiled at 5 p.m. EST Thursday.
Tesla said earlier that it expects to deliver 360,000 to 400,000 vehicles in 2019, a growth of approximately 45% to 65% compared with 2018.
Musk did warn during the final quarter of 2018, though, that deliveries may slow in the coming months as it starts to ship its Model 3 cars overseas, a process which takes time.
The analysts said it is unclear what Thursday’s announcement might be, but speculated that the electric car maker could introduce the standard ($35k) Model 3 version, provide an update on autonomy, or something else entirely.
“We think the introduction of the base Model 3 would be viewed positively, and do not expect TSLA to unveil the Model Y yet, as we believe management is cognizant of the short-term need to reassure investors on Model 3 demand and margins,” wrote the analysts.
Contact Uttara Choudhury at [email protected]