Tesla (TSLA) is scheduled to release its third-quarter earnings and revenue figures later this week, but market analysts and investors are managing their expectations following the company’s lackluster Q3 delivery results announced earlier this month. Despite this, Tesla’s stock made some gains on Monday.
Wall Street is bracing for a 30% drop in Tesla’s earnings per share (EPS) to 73 cents, marking the lowest figure in two years for CEO Elon Musk. However, revenues are expected to increase by 13% to $24.32 billion. Concerns linger about Tesla’s profit margins remaining below their self-imposed “floor,” with fears that more surprise price cuts might be in the cards for the final months of 2023.
Yet, some Tesla enthusiasts are already looking ahead to a potential rebound in deliveries in the fourth quarter, especially with the revamped Model 3 in China and the highly anticipated Cybertruck launch.
Morgan Stanley analyst Adam Jonas expressed, “expectations seem quite low for the quarter.” Jonas noted that “it is difficult to find an investor who doesn’t expect negative revisions for the quarter.” He also highlighted that the focus is shifting away from Q3 and toward 2024 volume projections and the successful execution of the Cybertruck.
Meanwhile, Wedbush analyst Dan Ives, a long-time Tesla supporter, believes that Wall Street will be particularly concerned with Tesla’s margin performance and the overall outlook for the fourth quarter. Ives anticipates that the Q3 conference call with Elon Musk will revolve around the new Model 3 and updates on Cybertruck production. Ives predicts that the Cybertruck will start reaching customers around “November/December,” deviating from his earlier projection of a Halloween timeframe.
“While the economic outlook is not particularly favorable, we believe that Tesla’s demand story has steadied at current price levels, focusing on a strong fourth quarter,” Ives asserted.
Additionally, on Monday, Piper Sandler analyst Alexander Potter reduced his price target for Tesla from 300 to 290 while maintaining an overweight rating for the shares. Potter commented, “Cybertruck and other growth initiatives are on the horizon, but we still wouldn’t be surprised if TSLA trades sideways, at best, in the coming months.” Tesla’s stock managed to edge up over 1% to 253.92 on Monday, maintaining an approximate 1.5% increase for the month of October.
