Tesla Inc. (NASDAQ: TSLA) shares saw a handy gain on Wednesday after the firm announced that its second-quarter production reached a record of 87,048 vehicles. It also saw a record number of deliveries at approximately 95,200 vehicles in the quarter. Despite this record, analysts did not seem to be impressed.

Of the 87,048 cars produced, there were 14,517 Model S/X and 72,531 Model 3 cars. Of the 95,200 electric cars delivered, Tesla showed that 17,650 were Model S/X and 77,550 were Model 3.

Also note that orders generated during the quarter exceeded deliveries, so result Tesla enters the third quarter with an increase in its order backlog.

Management believes the firm is well positioned to continue growing total production and deliveries in the third quarter.

While this was all well and good, Credit Suisse’s Dan Levy issued an Underperform rating for the stock with a $189 price target. The brokerage firm detailed in its report:

Assuming Tesla maintains its 2019 delivery guide, it would imply minimum second half deliveries of just over 200k units. We believe this may be tough to achieve, and model second half deliveries of 180k, especially as Tesla will still need to work its way through another cut to the US EV tax credit (in effect July 1). (Albeit, ramp on local China production will be important to watch)…

We model positive second quarter free cash flow, primarily related to positive working capital. Yet auto gross margin will be more of a mixed bag, which we expect to compress by about 200 basis points quarter over quarter to 18.3%.

Merrill Lynch issued an Underperform rating as well, but with a $225 price objective. The firm continues to question Tesla’s longer-term profitability, cash flow and subsequent valuation.

CFRA reiterated an Underperform rating with a $150 price target. Its report said:

We think second quarter vehicle sales were artificially boosted by the timing of customer purchases ahead of the 50% step-down in the federal EV tax credit from $3,750 to $1,875 on July 1, and expect to see a significant retracement in third quarter sales as a result, similar to what happened from the fourth quarter of 2018 to first quarter of 2019. Heading into the earnings release, the focus becomes Tesla’s vehicle margins, which will likely benefit from improved fixed cost absorption due to higher sales volume, but suffer from less favorable mix and price cuts.

Shares of Tesla traded up nearly 6% on Wednesday to $237.41, in a 52-week range of $176.99 to $387.46. The consensus price target is $277.50.

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