Tesla Inc.’s Supercharger deals with rivals could bring some financial payoff down the line, but not in a way that squares with the recent stock surge, Guggenheim says.
The electric-vehicle giant has announced in recent weeks that drivers of electric cars from Ford Motor Co.
F,
General Motors Co.
GM,
and Rivian Automotive Inc.
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would be able to access Tesla’s
TSLA,
Supercharger network, and that these competitors would adopt the company’s NACS (North American Charging Standard).
Read: Tesla’s EV charging standard is becoming widely adopted, in another boost for the stock
The arrangements could mean that more EV owners will use Tesla’s NACS, a trend that could add 53 cents per share in earnings “… in 2035,” Guggenheim’s Ronald Jewsikow wrote Monday.
When he applies “a healthy 40X multiple,” to the stock and a 12% discount rate, he estimates that this charging potential is worth around $6 a share today. But Tesla shares had run up 39% in a month as of the publication of his report, and Jewsikow said it was “tough to square our analysis with the ~$72 share price increase” over that span, which has been driven as well by optimism over artificial-intelligence initiatives.
Jewsikow has a sell rating and $112 price target on Tesla shares.
See also: Tesla deliveries could bring upside, with Deutsche Bank flagging China strength
“While we get the excitement the Supercharger network has created with the recent NACS announcements, we do not see it as a meaningful driver of upside,” he said.
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Jewsikow acknowledged that the recent deals help validate Tesla’s network, while giving the company “a chance to own charging economics over time for all makes and models.” Drivers of all sorts of electric vehicles will be able to use Tesla’s network, contributing to potentially “a sticky recurring revenue business.”
But he also said that bears would find reason to quibble, including over the idea that value creation here is “not grounded in economic reality.”
“The unlock of value post the Supercharger announcement has to be justified by other businesses, like AI/FSD [Full-Self Driving], which we believe investors should be more skeptical of (at least carry a much higher discount rate),” he wrote. And if drivers don’t need to buy a Tesla to access what’s been rated as the best charging network from a customer-satisfaction standpoint, Tesla may shed a “competitive advantage” when it comes to vehicle sales.
Tesla shares stumbled Monday, falling 6%. In other developments for the stock, a Goldman Sachs analyst became the latest to issue a downgrade, and funds associated with Cathie Wood’s ARK Investment revealed the recent sale of more shares.
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