Tesla reports second-quarter earnings and revenue after the stock market closes Wednesday. Analysts have been cutting quarterly profit expectations after company global vehicle sales sank more than 13% in Q2. This is what analysts are saying ahead of the report.
On Monday, Bank of America analysts raised their price target on Tesla stock to 341 from 305. They noted that the EV giant's Q2 earnings are "likely to be challenged due to tariffs" and "disappointing deliveries."
However, like many analysts and investor alike, Bank of America wrote Monday that on "a more positive note," Tesla did start its limited robotaxi ride-hailing service in Austin, Texas, which gives the firm more confidence on the promise to deliver unsupervised full self-driving, or FSD, by the end of 2025.
Meanwhile, Piper Sandler analyst Alex Potter on Monday discussed what President Donald Trump's decision to cut several regulatory credits could mean for Tesla.
"It's not as bad you think; We frequently receive questions about Tesla's regulatory credits, and for good reason: the company received ~$3.5 billion in 'free money' last year, representing roughly 100% of the FY24 free cash flow," Potter wrote.
The analyst added that it is "fair to ask" how regulatory changes will "threaten" Tesla's earnings outlook.
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"While it's true that the U.S. government is committed to rescinding financial support for the EV and battery industries, Tesla will still book around $3 billion in credits this year, followed by $2.3 billion in 2026," Potter said. "This latter figure represents a modest reduction vs. our previous expectation. There's no need for drastic estimate revisions."
Guidance And The Earnings Call
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, on Tuesday wrote that the" set-up into Tesla earnings" is a "dramatically different one than 3 months ago."
"Clearly losing the EV tax credits with the recent Beltway Bill will be a headwind to Tesla and competitors in the EV landscape looking ahead and this cash cow will become less of the story," Ives wrote Tuesday. "We would expect some directional guidance on this topic during the conference call. Importantly we anticipate deliveries globally to rebound in 2H led by some improvement on the key China front with the Model Y refresh a catalyst."
However, Ives said that Tesla's AI initiatives will be "front and center for investors" on the earnings call with analysts "listening carefully" for insights into Tesla investment into CEO Elon Musk's xAI company.
Cantor Fitzgerald analyst Andres Sheppard on Monday said that Tesla previously disclosed plans to revise its guidance, as it continues to assess the impacts of the global trade policy and the macro environment. Shepphard added that Musk has also hinted that the company expects a greater impact of tariffs on its energy business than its automotive business.
"As a result, we expect TSLA to likely revise down both its automotive and energy storage guidance in Q2. During the call, we also expect an update on the expansion of robotaxis in Austin, (and subsequent rollouts in CA and AZ), and an update on the timeline of the introduction of lower-priced vehicles," Sheppard wrote Monday.
Prior to Tesla's earnings release, the stock has an average price target of 313.66 with a hold rating, according to FactSet.
Tesla Earnings Upcoming
As of Tuesday, analyst consensus has Tesla EPS declining 25% to 39 cents with revenue falling around 13% to $22.19 billion, according to FactSet. However, the Sharp consensus, which tracks recent analyst revision trends for a potentially more accurate estimate, predicts sales coming in below $22 billion.
While expectations are relatively low for the top and bottom line numbers, investors and analysts will be arguably more interested in commentary on the earnings call from Musk about the company's plans for the still-unseen affordable vehicle and delivery guidance for the rest of the year.
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Investors will also be looking for comments on Trump's Big Beautiful Bill Act, which cuts the Biden-era EV tax credit at the end of September and does away with the zero-emission vehicle, or ZEV, credits and the corporate average fuel economy (CAFE) fines. Tesla has been a major beneficiary of the ZEV credits program and CAFE, with automakers that can't meet emissions requirements purchasing credits from the EV giant.
However, for investors, all of that takes a back seat to Tesla's robotaxi efforts. Musk will most likely sound a bullish tone on the earnings call about the Austin launch and self-driving.
Stock Performance
TSLA stock jumped around 1.7% to 333.90 during Tuesday's stock market. The stock advanced as high as 338 early Monday before reversing lower, edging down 0.35% to 328.49 at the close.
Overall, Tesla jumped 5.15% last week, moving above the 50-day moving average and an aggressive entry on Friday. The looming earnings make purchases more risky than normal.
Tesla stock rallied from late April to late May in part because Musk said he was backing away from politics and the Trump administration. Since then, Tesla stock has tumbled and rebounded according to news cycles — most of those generated by debate between Musk and Trump.
The stock initially soared after the robotaxi launch. Overall Tesla stock is up about 3% since the June 22 service release. Tesla stock has a new base with a traditional 367.71 buy point, according to MarketSurge chart analysis.
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At Tuesday's stock market close, Tesla stock was up 39% since the April 22 Q1 conference call, lifted by robotaxi bets. Shares are down about 17% for the year, and 32% below their all-time high of 488.54.
Tesla stock has a 21-day average true range of 4.24%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Tesla stock has a 66 Composite Rating out of a best-possible 99. The Elon Musk stock also has an 86 Relative Strength Rating and a 58 EPS Rating.
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