Tesla's Model 3 Demand May Lift Quarterly Deliveries, JMP Says

(Bloomberg) -- Tesla Inc. investors are underestimating how fast Model 3 demand is recovering as the automaker prepares to report second-quarter deliveries this week, according to JMP Securities.

JMP expects second-quarter Model 3 deliveries were 43,000 in the U.S., almost double what shipments likely were in the first quarter, but still below volumes from the second half of 2018, analyst Joseph Osha wrote in a note to clients. JMP's total unit delivery estimate for the quarter is 97,000, “with all of the upside coming from Model 3 volume,” Osha said. On average, analysts expect Tesla to report that it delivered about 88,000 cars in the period.

Read more: Tesla's Double-Edged Deliveries: A Record Could Undermine Margin

“In general we think the Street is underestimating the pace of recovery in Model 3 demand in the U.S., and additionally is not accounting for a full quarter of Model 3 exports,” Osha wrote. On the flip side, JMP believes U.S. shipments for both the Model X and S have peaked, although the analyst expects Tesla to update the S to defend its niche in the premium sedan space.

Tesla rose more than 3% in early trading before U.S. markets opened. The stock lost about a third of its value in the first half of the year.

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