Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.
SELL THE NEWS EVENT: Barclays says Tesla’s Robotaxi day on October 10 is “at the core of a quite radical investment thesis pivot that has now been in the making for nearly half a year.” The event critical in outlining the company’s plan for its next phase of growth, the firm tells investors in a research note. Barclays believes investors will “likely to remain entrenched in views,” with bulls seeing Tesla further owning the narrative on autonomous vehicles and skeptics seeing a long path to scaling. The firm sees a potential “sell the news” reaction to event. It does, however, expect a driverless pilot in select locations and expects Tesla to unveil a Model 2.5. Barclays keeps an Equal Weight rating on the shares with a $220 price target.
Q3 DELIVERIES: Deutsche Bank expects Tesla’s Q3 deliveries to at least meet Street expectations and estimates 460,000-465,000 units. Europe and U.S. appear to be trending lower in year-over-year terms while China is outperforming, helped by financing promotion and trade-in incentives, the firm tells investors in a research note. Deutsche says higher Cybertruck volumes will represent a larger headwind as deliveries ramp up. For the Robotaxi day on October 10, Deutsche expects an unveiling of the “CyberCab,” some type of robotaxi demo, and updates on operating parameters such as cost per mile, scale, and timeline. Moreover, Tesla should unveil the new lower cost vehicle slated for next year, adds the firm. Its bias leading up to the event has been positive. However, coming out of the event, the firm “would be tactically cautious as the bar seems quite high.” It could envision a “sell the news” type of market reaction. Deutsche Bank keeps a Buy rating on Tesla with a $295 price target.
Meanwhile, GLJ Research sees Tesla’s Q3 deliveries coming in below the consensus estimate of 461,500 units. The firm’s work points to 456,600 Q3 deliveries, which is up 2.9% quarter-over-quarter. Based on the latest China data, updates from the six countries that report daily sales in Europe and an analysis of U.S. vehicle counts, GLJ increased its Q3 delivery estimate to 456,600 from 449,000. It believes the buy-side “whisper” estimate is for Q3 deliveries of over 470,000. GLJ keeps a Sell rating on Tesla with a $24.86 price target.
TARGET RAISE: Piper Sandler raised the firm’s price target on Tesla to $310 from $300 and kept an Overweight rating on the shares. The firm also increased Q3 and fiscal 2024 delivery estimates for Tesla after reviewing intra-quarter sales data. Piper now models 459,000 deliveries for Q3 and 1.75M units for fiscal 2024. Q3 seems likely to be Tesla’s best quarter ever, and although European sales are weak, Cybertruck deliveries are supporting demand in the U.S., the analyst tells investors in a research note. The firm cites higher estimates for the target bump.
Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.
EV STANCE: Back in 2019, Vice President Kamala Harris called for tough emissions standards for automakers which would have required new vehicles to emit zero emissions by 2035, Ken Thomas and Sean McLain of The Wall Street Journal reports. In recent weeks, however, she has backed away from that stance as consumer demand for electric cars lessens and pressure on the issue from former President Donald Trump heats back up.
LIMITED COMPUTER PROGRESS: Morgan Stanley downgraded Rivian Automotive to Equal Weight from Overweight with a price target of $13, down from $16. The firm also downgraded its U.S. auto industry view to In-Line from Attractive. The downgrade is driven by a combination of international, domestic and strategic factors that may not be fully appreciated by investors. Morgan Stanley says U.S. auto inventories are on an upward slope with vehicle affordability still out of reach for many households. In addition, credit losses and delinquencies continue to trend upward for less-than-prime consumers, adds the firm. Further, China’s two-decade-long growth engine has reversed in terms of China profits flipping to losses and China producing nearly 9M units more than it sells locally. The firm believes Rivian’s ability to drive competitive compute progress in a financially prudent way is limited. Morgan’s projections for Rivian’s 2024 total capex and research and development of $1.3B and $1.7B, respectively, differ from Tesla’s artificial intelligence spend “by almost an order of magnitude.” It questions whether investors are ready to support a new computing capex cycle.
MORE BULLISH: UBS upgraded Brookfield Renewable Partners (BEP) to Buy from Neutral with a price target of $31, up from $24. The shares offer a still attractive yield, limited policy risk with its earnings supported by a base of stable contracted renewable assets, and potential for near-term outperformance following the Federal Reserve rate cuts, the firm tells investors in a research note. UBS sees Brookfield Renewable as well positioned to serve growing demand for carbon free electricity from the large tech companies and other corporates through its 65GW global advanced stage development pipeline of wind, solar, and battery storage projects.
BUY FIRST SOLAR: Truist initiated coverage of First Solar (FSLR) with a Buy rating and $300 price target. First Solar is a pioneer in thin-film module technology and the firm sees the company continuing to strengthen its competitive moat as geopolitical tensions coincide with pricing pressures in the silicon-based module supply chain. Ultimately, the firm sees this situation driving more developers to secure fully U.S. manufactured modules, while limiting the ability for incremental U.S. cell capacity build-out.
