Tesla earnings are coming up. Here’s what traders are looking for in the report

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Tesla earnings are coming up. Here’s what traders are looking for in the report

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for Tesla. RBC analyst Tom Narayan said the below-consensus deliveries results reflect “a perfect storm of one-timers complicating the overall demand story.” Big earnings drop expected For the first quarter, analysts polled by LSEG expect Tesla to report earnings of 51 cents per share, which represents a 39.8% year over year decline in earnings. Revenue is estimated to come in at $22.151 billion, or 5.1% lower than the same quarter last year. Several Wall Street firms lowered their price targets in advance of Tuesday’s announcement, with many forecasting that the company will lower its deliveries

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for the rest of the year. Citi analyst Itay Michaeli reiterated his neutral rating and reduced his price target to $180 from $196 per share, suggesting 26.7% upside from Monday’s close. Wells Fargo’s Colin Langan maintained his underweight rating and cut his price target to $120 a share, citing poor fundamentals. He is also forecasting negative growth. Deutsche Bank’s Emmanuel Rosner downgraded the stock to hold from buy and slashed his price target to $123 a share. Rosner had been a longtime Tesla bull , rating it as a buy for two years. To be sure, some analysts are remaining more optimistic. Morgan Stanley’s Adam Jonas reiterated his overweight rating and $310 price target. Despite the challenging environment for the EV market, Jonas believes “Tesla won’t let a good ‘EV recession’ go to waste.” Watch out for Model 2, robotaxi updates Analysts are interested in what CEO Elon Musk will say about Tesla’s demand

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and growth initiatives. In particular, updates on the rollouts of the Model 2 and robotaxi will be closely watched. Reuters reported earlier in April that Tesla was scrapping plans for its lower-priced, entry-level Model 2. Although Musk rebuked the report, which stated the company was abandoning its Model 2, there are still no updates on the project, per Bank of America’s John Murphy. “In our view, Tesla is still developing the Model 2 given that it is a fundamental piece of company’s growth story. However, looking at Tesla’s past SOP delays, we expect the Model 2 rollout to be much slower than management forecast and more of a 2026 event,” said Murphy. Deutsche Bank’s Rosner expressed concern that pushing out the Model 2 release date would pressure shares further. “Pushing out Model 2 will create significant earnings and FCF pressure on 2026+ estimates, and make the future of the company tied to Tesla cracking the code on full driverless autonomy, which represents a significant technological, regulatory and operational challenge,” Rosner said in a note. “We view Tesla’s shift as thesis-changing, and worry the stock will need to undergo a potentially painful transition in ownership base, with investors previously focused on Tesla’s EV volume and cost advantage potentially throwing in the towel, and eventually replaced by AI/tech investors with considerably longer time horizons.” Encouraging updates on the Model 2 would be a promising opportunity to maximize scale, according to Barclays’ Levy. To be sure, he noted that a more likely scenario is that Model 2 developments are on the sidelines, with greater emphasis put on the Robotaxi and Full Self-driving (FSD) technology). “Yet for now we believe this strategy pivot is a clear net negative for the Tesla investment thesis, as it casts significant uncertainty on the path ahead for Tesla, making success of the stock dependent on bets with seemingly binary outcomes,” said Levy. “Indeed, we are hard pressed to think of any other precedent of a company of Tesla’s size basing its path of success on such binary bets.”

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