＜Research＞JPM Maintains Tesla (TSLA.US) at Underweight, TP US$115

　　JPMorgan highlighted in a report that Tesla (TSLA.US) shares jumped 10.2% on Tuesday, compared to the 0.6% rise of S&P 500, ostensibly because 2Q24 deliveries came in slightly ahead of market expectations. However, Tesla's deliveries fell 5% YoY, marking the second consecutive quarter of YoY declines, reflecting a significant loss of market share in a global EV market that the broker estimated grew 22% over the same period.

　　The broker believed positive factors driving Tesla's share price include the fact that its sales decline has not been greater; that finally reversing the trend of producing more than consumers demand will help stabilise operating expenses and free cash flow; and that it has gained traction in the area of power storage, which will help it to balance out fluctuations in the automotive business.

　　However, the broker is concerned that the recent share price strength has been accompanied by a trend of weakening fundamentals, including deliveries, revenues, gross and operating margins, EBIT, and free cash flow. While 2Q deliveries of 444,000 units are 1% above recent market estimates of 439,000 units, they were actually lower than the 450,000 units estimated a month ago.

　　According to JPMorgan, Tesla has a highly diversified business model, an attractive product pipeline, and leading technology, but its execution risk is higher than average, and its valuation is broadly reflective of the positives. The broker slightly added its 2Q EPS forecast from US$0.56 to US$0.64 in response to delivery figures in the quarter.

　　JPM maintained Tesla's Underweight rating and target price of US$115.

　　(Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)