Tesla investors are cheering the company’s best-ever quarter with the shares of the company climbing in early trading, but Wall Street isn’t yet ready to drop its cautious stance.
While the third-quarter results were definitely “impressive”, and spurred at least one upgrade to outperform at Wolfe Research, most analysts questioned whether the profit and robust cash flow were sustainable and can be repeated next quarter. Demand for the company’s electric cars in a post tax-credit environment also remains a lingering concern.
Tesla shares pared gains to about 4.7 per cent after rising as much as 11 per cent earlier to its best intra-day price since Auguse 27. Here’s a roundup of analyst commentary following the results.
BofAML, John Murphy
Tesla’s better-than-expected third-quarter results are reminiscent of the third quarter of 2016, in which transitory factors helped to drive positive earnings and cash flow, although those were not sustainable, and “is likely the same case now”.
Tesla is “caught between a rock and a hard place,” in which further unit growth at higher-average selling price (ASP) is likely limited, while expansion of volumes into lower ASP will likely be materially dilutive to margins.
“If Tesla is successful in pushing volume, it would likely evolve into none other than a lower-margin automaker.”
Underperform, price target $200.
Goldman Sachs, David Tamberrino
“We question if this is not as good as it gets from a near-term upside surprise for shares.”With the exposure to China tariffs on imported components, and likely headwinds to mix as lower price point vehicles are offered, automotive gross margins may compress sequentially into fourth quarter, and could see further mix pressure into 2019 as the U.S. Federal Tax Credit begins to phase out for its vehicles.
Sustainability remains in question.
Sell, price target $225.
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Cowen, Jeffrey Osborne
Management walked back its 10,000/week production target and instead focused on hitting 7,000, which could lead to lower production estimates from the Bulls for 2019-2020.
Cash improvements bode well for short term debt repayments, but remains concerned about competition, long-term capex needs & valuation.
Continues to question the U.S. demand for the Model 3 in a post-tax credit environment. Says customers waiting for the $35,000 (Dh128,530) version of the Model 3 are subject to high degrees of price sensitivity relative to customers in the mid-sized premium sedan market.
Underperform, price target $250 from $200.
Morgan Stanley, Adam Jonas
Following the strong results, increases the value of the core Auto business by 12 percent to $220/share. Reduces the discounted cash flow valuation of Tesla’s shared mobility business to $71/share from $95/share previously, allowing for a slower ramp and increasing competition from peers.
Raises forecast for fourth-quarter GAAP operating margin to 5 percent from 1.6 percent previously, driven by the higher third-quarter base effect and 64,000 units of Model 3 in fourth quarter, or about 5,300/week.
Equal-weight, price target $291.
RBC, Joseph Spak
Strong third quarter across the board helped by Model 3 mix. Results may be sustainable near-term while Tesla figures out how to unlock lower-end Model 3 demand profitability.
Tesla may have crossed the line to become self-funding, which would be another clear positive. Expects positive momentum.
Sector perform, price target $325 from $315.
Jefferies, Philippe Houchois
On all metrics, third-quarter results comfortably beat the high end of consensus and quality looks rather good.
Third quarter materially de-stresses Tesla’s balance sheet and could support more leverage if the company can demonstrate more than one quarter of healthy free cash flow generation and sustained demand for Model 3.
Hold, price target $360.
Baird, Ben Kallo
Tesla reported a Model 3 gross margin of 20 per cent, which significantly exceeded Mr Baird’s expectations.
Strong free cash flow of $881 million bolsters Tesla’s balance sheet and should be sufficient to allay investor fears over cash burn.
The flip to profitability in third-quarter could be the start of a narrative shift, as the market focuses on earnings and free cash flow generation potential.
Outperform, price target $411.
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
Company%20Profile
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Company%20Profile
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Getting there
The flights
Emirates and Etihad fly to Johannesburg or Cape Town daily. Flights cost from about Dh3,325, with a flying time of 8hours and 15 minutes. From there, fly South African Airlines or Air Namibia to Namibia’s Windhoek Hosea Kutako International Airport, for about Dh850. Flying time is 2 hours.
The stay
Wilderness Little Kulala offers stays from £460 (Dh2,135) per person, per night. It is one of seven Wilderness Safari lodges in Namibia; www.wilderness-safaris.com.
Skeleton Coast Safaris’ four-day adventure involves joining a very small group in a private plane, flying to some of the remotest areas in the world, with each night spent at a different camp. It costs from US$8,335.30 (Dh30,611); www.skeletoncoastsafaris.com
UAE currency: the story behind the money in your pockets
Champions parade (UAE timings)
7pm Gates open
8pm Deansgate stage showing starts
9pm Parade starts at Manchester Cathedral
9.45pm Parade ends at Peter Street
10pm City players on stage
11pm event ends
Match info:
Portugal 1
Ronaldo (4')
Morocco 0
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
Killing of Qassem Suleimani
KILLING OF QASSEM SULEIMANI
Zayed Sustainability Prize
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
'Dark Waters'
Directed by: Todd Haynes
Starring: Mark Ruffalo, Anne Hathaway, William Jackson Harper
Rating: ****
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
BRAZIL%20SQUAD
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
COMPANY%20PROFILE
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Company%20Profile
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Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
Palestine and Israel - live updates
