Tesla Could Deliver 800,000 Cars In 2021 For Implied 48% Revenue Growth – Deutsche Bank
Automaker Tesla Inc managed to nearly meet its goal of half a million vehicle deliveries during the course of 2020 despite an unprecedented economic downturn that drove down luxury spending. Tesla's vehicle delivery report, released earlier this month revealed that the company had delivered 499,550 vehicles during the year, with its chief executive officer Mr. Elon Musk sweetening the deal for Tesla's delivery within the last three days of 2020 by promising three months of free Full Self Driving - Tesla's driving assistance platform.
The company's strong performance despite no small odds seems to have impressed Deutsche Bank, who is out with a fresh analyst note. Picked up by Sina Technology, this note expresses the bank's belief that Tesla will deliver nearly 800,000 vehicles this year as it expands production in both of its Berlin and Shanghai plants.
Deutsche's New Forecast Marks Slight Growth For Previous 2021 Tesla Delivery Estimate
The new forecast comes in the wake of the delivery report and it projects Deutsche's growing optimism about Tesla. Its previous forecast for the automaker's 2021 deliveries stood at 775,000 vehicles and given the latest figures for 2020, the bank has increased this estimate by roughly 3%.
In addition to the delivery estimate, Deutsche also believes that Tesla will earn roughly $46 billion in revenue through the course of this year. The company should report its earnings for the four-quarter of 2020 later this month, and should analyst estimates polled by Yahoo Finance materialize, then Tesla will have earned $31 billion revenue in 2020 - with Deutsche's estimate implying a 48% revenue growth.
The bank's estimate for 2021 revenue reflects the average value of the analyst estimates polled by Yahoo, with the average wager sitting at $45 billion and the highest estimate sitting at $54.5 billion. Tesla is projected to grow by more than 300% on average for the next five years and earnings per share estimates for 2020 project a return of $2.3/share, which is set to grow to $3.88/share this year.
Deutsche's advice to investors then moves towards estimating Tesla's share price. According to the bank, it expects the automaker to be worth $705/share, or, based on current shares outstanding, $668 billion. This is roughly $20 billion lower than what the market capitalization stood at when trading opened today but is significantly higher than Deustsche's previous price target of $500/share for Tesla, which puts the company's market value at $474 billion.
The rationale behind analyst Emmanuel Rosner's decision to not only hike Tesla's price target but also to increase the company's delivery estimate is his belief in untapped demand for the company's products in both Europe and Asia. He believes that Tesla's strong delivery performance in 2020's final quarter reflects this demand in the two continents - both of which are at the center of significant production investment, both in terms of time and money, by Tesla.
Data compiled by ev-sales.blogspot reveals that year-to-date November 2020, Tesla's Model 3 was the second most popular electric vehicle in Europe and the most popular in China in terms of deliveries. In China, it stood second for November deliveries only to the HongGuang, a much smaller and cheaper car which reflects the need for lowering the cost of entry into the market for new customers. In Europe, the Model 3 came second to the Renault Zoe for year-to-date deliveries, another two-door electric vehicle aimed towards the masses.
Importantly for Tesla, especially as it plans to scale up production in China and get its plant in Brandengberg-Berlin up and running as soon as possible, year-to-date figures for November 2020 in both regions mark for strong year-over-year growth. While the growth in China is unsurprising, especially since Tesla only managed to smooth out production in the country at the tail end of 2019 and in 2020, it still shows that Rosner's belief of untapped demand in the region might not be unwarranted.
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