Tesla reports post-market earnings. Here’s what Wall Street is saying
Investors will be closely watching Tesla’s second-quarter results, due after the bell on Tuesday, amid fierce competition in the electric vehicle market. Analysts expect Tesla to post earnings of 62 cents per share on revenue of $24.77 billion. While the revenue estimate is slightly higher than the $21.30 billion Tesla reported in the first quarter, the earnings forecast is still 30% lower than a year ago. Last quarter, Tesla reported adjusted earnings of 45 cents per share on revenue that fell 9% to $21.30 billion from the fourth quarter. Tesla released its second-quarter delivery figures in June, which are the closest approximation to sales. Shares rose on better-than-expected second-quarter deliveries, but then sold off after CEO Elon Musk said Tesla would delay the launch of the Robotaxi. Tesla is now flat year-over-year. Tesla stock on TSLA’s YTD mountain in 2024 With Robotaxi delayed, upcoming earnings are “a potentially significant near-term catalyst,” Guggenheim analyst Ronald Jewsikow wrote in a note earlier this month. Guggenheim rates Tesla a sell with a 12-month price target of $134, implying a more than 46% drop in the stock from Monday’s close. “If the timeline for a physical prototype or securing some form of credible end-market testing is delayed, how can investors trust the promises of Robotaxi’s future? We continue to believe that large-scale Robotaxis will be a 2030-plus event,” Jewsikow added. Other analysts also believe Tesla’s fundamental business outlook remains murky. “Q2 forced investors to at least consider that fundamentals remain challenging, and we see a risk that the stock could reverse if results fall short of expectations,” Barclays analyst Dan Levy wrote. “Indeed, Q2 could reaffirm continued pressure on margins, even if they are near bottom.” Levy rates Tesla as equal weight. Despite the excitement around Tesla’s pivot to self-driving cars and artificial intelligence, Levy believes it’s unclear how long that momentum can drive the stock — and said weak near-term sales volumes create “significant uncertainty.” Evercore’s Chris McNally also sees Tesla’s stock falling further. The delay of Robotaxi from early August to October has slowed the rally, McNally said. McNally said the second quarter “doesn’t look any easier,” as “demand/production continues to be flat and has essentially remained 425–445k for seven consecutive quarters, with [the] expect Q3 to be similar.” The analyst has an outperform rating and a $145 price target on Tesla, implying a 42% downside potential from Monday’s close. The rally that drove Tesla shares in June and July was simply “retail love child” among individual investors, according to Wells Fargo analyst Colin Langan. In addition to weak fundamentals, Langan also highlighted new tariffs on electric vehicle batteries from the U.S. and EU as a headwind for Tesla. Investors have so far “ignored the impact” of the tariffs, according to Langan, who forecasts they will increase costs by $570 million in 2024 and $1.2 billion in 2025. The U.S. presidential election also poses a headwind — the analyst sees a Trump victory as a risk to Tesla, given his plans to curb President Joe Biden’s deflationary policies. Biden. To be sure, some analysts are bullish on Tesla. Morgan Stanley’s Adam Jonas, for example, has a bullish rating on the stock. According to Jonas. “Investors are starting to consider Tesla’s potential to play into the AI theme, but recent climate change indicators are drawing greater attention to Tesla’s dominant position in energy storage,” Jonas said in a note this month. Jonas maintains a $310 price target on Tesla shares, suggesting 23% upside potential from Monday’s close. —CNBC’s Michael Bloom contributed to this report.
