Tesla is trading near an aggressive early entry amid the current whipsaw stock market and with third-quarter earnings due next week. Meanwhile, a firm on Thursday handed TSLA a price target that represents 29% downside.
Shares fell about 1.5% to 428.75 during Thursday's stock market. In intraday trade Wednesday, shares broke a steep downtrend within a volatile handle in a huge, long consolidation. Getting above Wednesday's high of 440.51 could offer an early entry for aggressive investors. However, the current volatile stock market and upcoming earnings raise the risks.
BNP Paribas analyst James Picariello on Thursday gave Tesla stock an underperform rating with a 307 price target. That represents 29% downside compared to trading levels in Thursday's market.
Picariello noted that Tesla's robotaxi and Optimus humanoid robot businesses "generate zero sales today, yet inform" around 75% "of our $1.02 trillion price target."
The firm, however, "takes an optimistic view toward both the robotaxi & Optimus businesses," but Picariello added that TSLA's "unfavorable risk/reward is clear."
BNP Paribas bases its target on an estimated robotaxi fleet of 525,000 by 2030 with 17 million cumulative Optimus deliveries by 2040, for $20,000 per unit. Picariello also estimates more than 11 million active full self-driving, or FSD, subscriptions by 2030.
Tesla stock is on the IBD Leaderboard watchlist and entered Thursday's stock market up 5.3% on the week, based primarily on a strong move Monday where it regained its 21-day exponential moving average.
The stock tumbled 5.1% on Friday's market sell-off, undercutting the 21-day line and recent lows. However, TSLA now has a 13%-deep handle with a 470.75 buy point on a very deep base going back to late December.
Tesla FSD: Mad Max Mode
Tesla stock eyeing a possible early entry comes as the EV giant released a new "Mad Max" mode as part of its latest FSD update Wednesday. The mode allows for higher speeds and more aggressive driving.
Tesla has been rolling out its latest FSD V14 in recent days, offering updates. However, only a limited number of FSD customers, including several Tesla influencers, have access to the software.
Tesla Earnings Due
Meanwhile, the EV giant reports Q3 earnings and revenue after the stock market close on Oct. 22. Analyst consensus pegs third-quarter EPS falling 26% to 54 cents with sales increasing about 4% to $26.27 billion.
However, the Sharp consensus, which tracks recent analyst revision trends for a potentially more accurate estimate, predicts earnings of 55 cents per share and revenue totaling $27.12 billion.
At the beginning of October, Tesla reported that it delivered a record 497,099 vehicles in Q3, and topped the prior all-time high of 495,570 in Q4 2024, buoyed by the now-expired $7,500 U.S. EV tax credit. Those strong sales also significantly reduced EV inventories, also positive for Q3 results.
Barclays analyst Dan Levy on Thursday raised his Tesla price target to 350 from 275 and kept an equal weight rating.
Levy wrote that Tesla enters Q3 earnings with two contrasting "stories," Those narratives are autonomous driving and AI, coupled with CEO Elon Musk's proposed compensation package, along with a "weakening fundamental backdrop."
Barclays expects a Q3 EPS beat, supported by gross margin and volume strength, but is "leaning neutral to slightly negative" into the print following a recent rally given its "muted view" on fundamentals going forward.
Earnings Call Focus
Investor and analyst attention during the earnings release and conference call will be on Musk's projections for robotaxi scaling and autonomy.
Currently, the top three questions, as voted for by retail investors, to be asked during the earnings call are:
What are the plans for new car models? Will Tesla build compact car models leveraging the unboxed Cybercab platform? Will Tesla build a traditional SUV and pickup truck in the Cybertruck platform?
What are the latest Robotaxi metrics (fleet size, cumulative miles, rides completed, intervention rates), and when will safety drivers be removed? What are the obstacles still preventing unsupervised FSD from being deployed to customer vehicles?
What are the present challenges in bringing Optimus to market considering app control software, engineering hardware, training general mobility models, training task specific models, training voice models, implementing manufacturing, and establishing supply chains?
Investors can keep tabs on the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Tesla stock has a 76 Composite Rating out of a best-possible 99. The stock also has a 90 Relative Strength Rating and a 54 EPS Rating.
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