Deutsche Bank weighed in on Polestar Automotive's ( NASDAQ: PSNY ) earnings report from last week that sent shares flying.
Analyst Emmanuel Rosner said the electric vehicle maker's Q3 deliveries were on track and Q4 could be a record month for deliveries, but warned the margin outlook could soften heading into 2023.
PSNY's gross margins for Q3 were noted to be below expectations, driven by lower ASPs from unwinding product/market mix and rising input costs. A trend that may continue into 2023.
Rosner's number crunching: "Management highlights that a majority of the vehicles set for 4Q delivery are already in-transit to customers and all ~20k have already been produced, giving us confidence in the company’s ability to hit 50k for the year. Net/net, Polestar expects to generate 4Q gross margins on par with 3Q, and we therefore cut our estimates for the final quarter to 0.9% (flat QoQ) down from 6.0% prior, with vehicle GM at 0.8% (from 5.1% prior), reflecting the weaker margin performance YTD and slower margin improvement ahead amid elevated input costs. This leads to Ebitda of -$826m for the year, not reflecting the one-time listing expense in 1H>"
Deutsche Bank reiterated a Hold rating on PSNY and dropped its price target to $9 from $10.
Shares of Polestar rallied 15% last week following the earnings report, but still trade about 58% below their post-SPAC high.
For further details see:
Polestar Automotive is viewed cautiously at Deutsche Bank due to margin pressures