Tesla is about to launch its second quarter 2020 effects Wednesday after the final bell in New York, and all eyes will be on whether the company could benefit the coronavirus pandemic.
If Tesla reports its fourth consecutive quarterly gain, it will have met all the criteria for inclusion in the S.P.500 index.
If Tesla doesn’t succeed in profit targeting, its epic uptick in the inventory market that has made it the world’s most valuable automaker this year could be in jeopardy. Automaker inventories have risen to 292% this year until the end of Monday. Recently, it reported better-than-expected vehicle delivery figures in the quarter, the coronavirus pandemic forced the closure of its Fremont, California plant during the quarter high.
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The stock continued to rise to new heights amid a series of Wall Street updates, the announcement of a Battery Day event and optimism about its inclusion in the SP 500. The opposing downside bearish bets to Tesla also set a record: Tesla about to fit the first company into a $20 billion short bet opposite it.
Here’s what 4 analysts say about Tesla before its effects were published:
Rating: neutral
“While street numbers are looking for red ink this quarter, we are modeling profitability with the 90k delivery number and GM’s efficiencY/cost relief search by cutting Musk and Co. of the red ink,” Wedbush’s Daniel Ives wrote on a Monday note
Although Tesla faced a “dark macro context and COVID typhoon clouds,” “it worked perfectly this quarter by publishing 90,000 installments and crushing Street’s expectations on Aaron Judge’s path,” Ives said.
Investors will be focusing on its second-quarter profitability, China delivery trajectory, Model 3 demand outlook, and any hints about Battery Day announcements.
“In a nutshell the success in China out of the gates is a major achievement for Tesla and if this trajectory continues will be a ‘game changer’ for its EV penetration story over the next decade,” Ives said.
Price target: $1,500
Rating: Market perform
“We believe that any intermediate-term success that TSLA might discuss during its earnings call tomorrow is now fairly reflected in the stock price,” Joe Osha of JMP Securities wrote in a Tuesday note downgrading Tesla.
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“All this progress makes it difficult to resolve the investment,” Osha wrote. “We continue with TSLA making the most productive battery-powered electric cars on the market, and apart from Volkswagen, we don’t even know who can offer viable competition.”
Still, he added that “inventory has now reached our target level, however, and that investors face demanding situations to make more profit from here.”
Price target: $1,000
Deutsche Bank raised its Tesla value target to $1,000 following the company’s best-than-expected second-quarter delivery figures.
“Tesla’s inventory has reached new all-time highs every day, backed by leaks from forged 2T and prospective inclusion in sp 500 and sometimes more times through a very positive sentiment from investors toward electrification, which is likely to attract giant flows.” ESG’s budget that have limited characteristics in public markets,” Emmanuel Rosner in a July 6 note.
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Considering higher volumes, Rosner increased its quarter earnings forecast to $5.84 billion of $4.97 billion, “suggesting that Tesla could potentially achieve GAAP profitability in the quarter, which would meet the newest criteria for inclusion in the S-P 500.”
Rating: Sale
“We believe that TSLA’s actions have surpassed the underlying basic concepts and do not adequately reflect the various dangers surrounding the story, adding the fact that TSLA is entering a primary spending cycle with the Gigafactories 4 and 5 structure, which we expect to act as a significant drag. loose money flow in the coming quarters,” Garrett Nelson of CFRA wrote on a note Friday.
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“Furthermore, we view the Model Y price reduction as a red flag and see the potential for an equity offering given the stock’s meteoric run-up, noting that TSLA issued equity in February at $767/sh, roughly half its current price,” he added.
“Finally, we, the stocks, have benefited from the short-term policy (the existing short-term interest of 7.5% has fallen from 23.2% a year ago) and the hypothesis that it will publish a GAAP profit in the second quarter next week and will be eligible for the inclusion of SP 500 (incentivize the purchasing index fund) , but this is far from guaranteed.”