- Tesla reported its anticipated second-quarter earnings on Wednesday after the market ended.
- The report comes after the automaker met Wall Street’s expectations of second-quarter vehicle delivery numbers.
- Investors and analysts will be closely watching to see if Tesla is able to make a profit this quarter. If it does, it will meet the final criteria for inclusion in the S&P 500 index.
- Here’s what four analysts said ahead of Tesla’s earnings.
- Watch Tesla live insiders on the business market.
- Read more on Business Insider.
Tesla will report its second-quarter 2020 earnings after Closing Bell in New York on Wednesday, and all eyes are seeing the company’s ability to turn a profit amid the coronavirus epidemic.
If Tesla did indeed report its fourth consecutive quarterly profit on Wednesday, it would have met all the criteria for possible inclusion in the popular S&P 500 index.
Here are the key numbers of the survey expected by Bloomberg:
- Adjusted earnings per share: -14 cents, required
- Revenue: $ 5.19 billion, expected
If Tesla falls short of the profit target, its epic stock rally makes it the world’s most valuable automaker that could be in jeopardy this year. The automaker’s shares have risen as high as 292% through Monday’s close this year since the better-than-expected second-quarter vehicle delivery numbers, which have also come as a coronovirus epidemic, its Fremont. , California, forced most of the factory to be close to the quarter. .
Since, amid numerous occasions of the Wall Street upgrade, the announcement of its upcoming Battery Day event and the S&P 500 inclusive optimism, shares have continued to climb higher. In addition, the recession bets against Tesla also set a record – Tesla became the first company with a small bet of $ 20 billion.
Here are four analysts who spoke about Tesla before releasing their earnings.
1. Wesbush: Tesla has “executed flawlessly in this quarter”
Price Target: $ 1,250
“While street numbers are all over the map and looking for red ink this quarter, we are modeling profitability with 90k delivery numbers and GM continuing to cut efficiency / cost and away from red ink Musk & Co Are receiving, “Daniel Ives of Weibusch wrote in Monday’s note.
Even though Tesla has faced “dark macro backdrops and COVID Storm Cloud”, it has had a tough time crushing street expectations in 90k deliveries and home run fashion like Aaron Judge this quarter. Investors will focus on any indications around its second quarter profitability, China delivery trajectory, Model 3 demand outlook and battery announcements.
“In short, the success in China from Gates is a major achievement for Tesla and if this trajectory continues, its EV entry over the next decade will be a ‘game changer’ for the story.”
2. JMP Securities: “Any intermediate-term success discussed by TSLA during its earnings call yesterday is now reflected in the stock”
Price Target: $ 1500
Rating: Market performance
Joe Osha of JMP Securities wrote the note on Tuesday to introduce Tesla to the market, “We believe any success that could be discussed by TSLA during tomorrow’s earnings call , Is now largely reflected in the stock price. ”
Osha wrote that he expected Tesla to “show progress on multiple fronts” when it reported earnings on Wednesday, including higher gross margins. JMP also expects Tesla to receive approximately 435,000 units for the year, and its Shanghai factory will provide additional capacity to meet any demand.
“All of this progress makes investment decisions challenging,” Osha wrote. “We believe that TSLA makes the best battery electric vehicles in the market, and apart from Volkswagen it is not clear to us as to who can offer a competitive offer.”
Nevertheless, he said, “The stock has now reached our target level, and we think investors face challenges in earning extra returns here.”
Read more: The $ 47 billion fund manager shares 3 trades that are making for a drastic change in the economy – including a play on the Tesla-led boom of electric vehicles.
3. Deutsche Bank: “Tesla Stock Creates New All-Time High Every Day”
Price Target: $ 1000
Deutsche Bank raised its Tesla price target to $ 1,000 after the company’s better-than-expected second-quarter delivery numbers.
“Tesla stock is seemingly building new all-time highs every day, supported by leaks of strong 2Q and potential inclusion in the S&P 500 and more broadly a very positive investor sentiment towards electrification that could possibly lead to larger ESGs. The driven fund is pulling in flow. There are limited options in the public markets, “wrote Emanuel Rosner in a July 6 note.
Factor in the better volume, Rosner raised its second-quarter revenue forecast from $ 4.97 billion to $ 5.84 billion, “suggesting that Tesla could potentially achieve GAAP profitability in the quarter that was included in the S&P 500 Will meet the final criteria to be done, ”he said.
4. CFRA: “Shares have moved beyond the underlying fundamentals”
Price Target:$ 1,100
“We think TSLA shares have moved beyond the underlying fundamentals and do not appropriately reflect the various risks surrounding the story, including the fact that TSLA is in a major spending cycle with the creation of Gigafactories 4 and 5 Is entering, which we expect to act as a significant drag. On free cash flow over the next several quarters, “CFRA’s Garrett Nelson wrote in Friday’s note.
“In addition, we see the reduction in the price of the Model Y as a red flag and the ability to offer equity given the meteor-up of the stock, given that TSLA reported $ 767 / sh in February Issued equity, its current price is almost half. ” Added.
“Finally, we think the shares have benefited from short-covering. (Current short interest of 7.5% is down from 23.2% a year ago) and speculation that it will post a Q2 GAAP profit next week and S&P. 500 will be eligible for inclusion (Prompt Index Fund. Purchase), but this is far from guaranteed. “