A notable Tesla Inc (NASDAQ:TSLA) bearish analyst shares thoughts on what the company will report for third-quarter financial results and what CEO Elon Musk will say on the conference call.
The Tesla Analyst: GLJ Research analyst Gordon Johnson maintained a Sell rating on Tesla with a $19.05 price target ahead of the earnings report.
Musk may be "heavy on the optimism" during the company's third-quarter results and conference call, Johnson said in a new investor note.
The analyst said Musk's optimism would come ahead of the Nov. 1 shareholder vote on his pay package.
While Johnson is bearish on Tesla, he says that consensus estimates for Tesla's third-quarter results could be "too conservative."
"The real driver of how Tesla's stock trades post-print won't be the numbers – it'll be whatever story Elon Musk decides to tell this time," Johnson said.
Johnson spoke with Tesla investors ahead of the earnings call and said the consensus is that the CEO will sound "aggressively upbeat" as he needs to keep the stock price high ahead of the vote for his pay package.
"We find it difficult to believe that any serious institutional investor could, with a straight face, vote to ratify that," Johnson said of Musk's pay package.
The analyst expects Tesla's fundamentals to unravel in the fourth quarter, but doesn't expect Musk to talk about that on Wednesday.
"Unlike last quarter, when he offered a rare moment of candor about the road ahead, we anticipate this call will be heavy on optimism and light on truth. As a result, the near-term risk is skewed to the upside into the print."
Johnson said any enthusiasm for shares after earnings could be "an opportunity to reset short positions."
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Investors Expect A Beat: Tesla previously reported third-quarter deliveries of 497,099, a new company record. The company also reported third-quarter production of 447,450 vehicles.
Record deliveries could be factoring into why prediction markets show investors believing the company will beat estimates for the third quarter.
On prediction market Polymarket, users have bet over $535,000 on whether Tesla will beat earnings. The market shows an 80% chance that Tesla will beat third-quarter earnings per share, with Polymarket using 50 cents per share as the non-GAAP earnings estimate.
Prediction market Kalshi has a betting market for what Musk and Tesla will say on the earnings call Wednesday night. Among the top predictions are items that could be part of Tesla's future growth story, with words like "Energy," "Robotaxi," "FSD," and "Optimus" all having 95% or greater odds of being said.
Further down the list could be potential headwinds for the company with predictions of Tesla saying China (85%), Cybertruck (83%) and Competition (46%).
According to data from Benzinga Pro, Tesla has missed analyst earnings estimates in three straight quarters and in seven of the last 10 quarters overall.
The company has also missed revenue estimates in four straight quarters and in seven of the last 10 quarters overall.
TSLA Price Action: Tesla stock is down 2.2% to $433.08 on Wednesday versus a 52-week trading range of $212.11 to $488.54. Tesla stock is up 14.3% year-to-date in 2025.
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