Morgan Stanley analyst Adam Jonas predicts Tesla Motors to miss earnings by big margin

One of Tesla’s biggest bulls reiterated his ‘Overweight’ rating despite the massive earnings miss he is forecasting.

Tesla Motors Inc. is all set to report its first quarter earnings for FY15 on Wednesday May 6. The EV maker is likely to continue reporting losses during this year as it raised its Model X crossover vehicle production.

Adam Jonas analyst at Morgan Stanley, who is one of company’s most candid bulls, said he thinks that Tesla will report losses of $0.77 per share for 1QFY15. If his estimate is right, that will be the biggest miss of the company compared to consensus forecast of $0.48 per share.

For the complete fiscal year 2015, Jonas believes the company will report losses of nearly $2.30 a share, as compared to consensus projection of $0.58 a share of earnings. For the year 2016, he is seeking for earnings of $1.40 per share in contrast with $3.99 earnings per share estimated by analysts.

The analysts at Morgan Stanley expect the company’s gross margin to grow to 25% from 22.1% in the quarter. Although, he considers the margin will decline in the 2nd half of the current year as Tesla increase Model X production.

Company’s management already declared that it delivered almost 10,030 cars in the first quarter, surpassing their previous guidance. More importantly, Jonas believes the company will not be able to meet its own guidance for deliveries of 55,000 vehicles during the year. He forecast 51,000 vehicle deliveries.

As Tesla is putting Model X into production in 2015, shareholders can expect the company’s management on how they are implementing the whole process. They should optimistically provide complete details regarding launch of the vehicle this year, how rapidly they can upgrade production and regarding order backlog of Model X it has. Shareholders should expect gigafactory update, which the company is building in Nevada.

Although, Jonas is projecting a massive miss for the EV manufacturer, he remains bullish on the company. He restated his rating of Overweight and stock price target of $280 on the stock of the company, which reflects 35% of upside potential against current stock price.

Tesla stock is down 0.01% to $226.03 at market close on Friday May 2. The car maker has 52 week high and low of $231.77 and $220.40, respectively.

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