Investor's Corner
Tesla (TSLA) gets optimistic outlook from Wall St ahead of Q3 2018 earnings report
Tesla shares (NASDAQ:TSLA) are holding their gains as the company heads towards its third-quarter earnings call. Following a 12.72% rise on Tuesday amidst the company’s earlier-than-expected earnings announcement and a vocal short-seller’s change of heart, Tesla stock was up 2.51% on Wednesday’s opening bell, breaching the $300 barrier and trading at $301.52 per share.
With the electric car maker invoking a sense of confidence with its upcoming earnings call, several Wall Street analysts have adopted an optimistic outlook on the company. JMP Securities analyst Joseph Osha, for one, gave Tesla an “Outperform” rating and a $350 price target, citing the accumulated “expertise” that the company has exhibited in electric vehicle development and manufacturing.
Baird analyst Ben Kallo has also given Tesla an “Outperform” rating, stating that the company’s positive cash flow could prove sufficient to drive TSLA shares higher. With regards to the upcoming earnings call, Kallo noted that management might provide additional details on how the company intends to increase its production capabilities over the next few quarters.
New Street Research’s Pierre Ferragu has given TSLA stock a “Buy” rating, stating that he expects major free cash flow beat in the third quarter, and continued positive free cash flow in Q4 and beyond. Ferragu noted that Tesla might still raise equity down the line to strengthen its balance sheet, but the company would likely do it only in good market conditions and at the right price.
James Albertine of Consumer Edge further noted that Tesla’s fundamentals had seen a notable improvement in the third quarter, thanks to the ramp of higher-margin Model 3 that sold for around $50,000 to $55,000. The Wall Street analyst has an “Equalweight” rating on Tesla ahead of the company’s Q3 2018 earnings call.
Even Brian Johnson of Barclays, who has an “Underweight” rating on TSLA stock, notes that a sharp increase in Tesla’s deliveries and production have set up a “bear trap.” Johnson further stated that Tesla could have boosted its cash balance by about $800 million in the quarter, bringing the company’s balance to around $3.5 billion.
-->Tesla shares have exhibited an immense amount of volatility in the past couple of months, partly due to the actions of Elon Musk. During August, for example, Musk posted a tweet stating that he was considering taking Tesla private at $420 per share, and that he had “funding secured.” The fallout of Musk’s “funding secured” tweet included an eventual lawsuit from the Securities and Exchange Commission, who alleged that the CEO misled investors with his Twitter announcement. Musk and the SEC would later reach a settlement, but the damage to Tesla stock would be notable.
Despite the noise surrounding the company and its CEO, though, the fundamentals of Tesla have been exhibiting signs of improvement. When the company released its vehicle production and deliveries report, for one, Tesla revealed that in the third quarter, it had manufactured a total of 80,142 electric cars including 53,239 Model 3, and delivered a total of 83,500 vehicles, comprised of 55,840 Model 3, 14,470 Model S, and 13,190 Model X. VIN registrations for the Model 3 seem to be picking up this October, and a new variant of the electric sedan, the Mid Range Model 3 RWD, was unveiled earlier this month as well.
Overall, this upcoming Q3 2018 earnings call could be historic for the electric car maker. With Tesla out of “production hell,” the company might be on the cusp of entering an era where it is making money. In Elon Musk’s words earlier this year, it’s high time that Tesla starts showing some profit for all its hard work.
Tesla’s Q3 Update letter would be posted on Tesla’s Investor Relations website after markets close today. Tesla would start its Q3 earnings call at 3:30 pm Pacific Time (6:30 pm Eastern Time).
As of writing, Tesla shares are trading -1.02% at $291.14 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
-->Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
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