Tesla is poised to beat earnings and possibly qualify for S&P 500 inclusion, Barclays says

Published Tue, Apr 28 20209:10 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

( This story is for CNBC Pro subscribers only ). Tesla is poised to report a blowout first quarter this week that might make it profitable enough to join the S & P 500, Barclays said in a note to clients. Elon Musk's car company is slated to release its first quarter earnings after the bell on Wednesday, and Barclays is more bullish about the results than most of Wall Street. Barclays projects the electric car company to report adjusted earnings per share of 61 cents, compared to a consensus loss of 32 cents, according to FactSet. "TSLA will post a profit – the only question is will it be a profit large enough to qualify for S & P inclusion," the note said. To be included in an S & P index, companies must post positive earnings based on a generally accepted accounting principles over the previous four quarters, and the most recent quarter must also show positive earnings. The earnings are calculated as net income after discontinued operations are removed. Tesla, with a market cap of more than $140 billion, would be in the large-cap S & P 500 if it met the requirements. Over its previous three quarters, the company has reported a GAAP net loss attributable to common shareholders of $157 million. Joining the S & P 500 could provide a boost to Tesla shares, which would need to be added to funds that follow the index and they would become newly eligible for some other funds to buy. Barclays also said that it expects Tesla to keep its full-year delivery guidance of 500,000 vehicles the same, despite the pandemic. The company's Fremont, California production line won't remain closed for long, Barclays projected, regardless of what government officials say. "TSLA will quickly ramp at Fremont with a non-union workforce and notwithstanding any local restrictions," the note said. Tesla paused production at the plant in late March after government officials said it was not an essential business. Despite expecting the company to beat expectations, Barclays kept its underweight rating and $300-per-share price target on the stock. Barclays does project Tesla to report a loss in the second quarter. The stock closed at just under $800 per share on Monday. It has gained roughly 91% so far this year, and about 240% in the past 12 months.

Tesla CEO Elon Musk speaks during the Tesla China-made Model 3 Delivery Ceremony in Shanghai.

STR | AFP | Getty Images

(This story is for CNBC Pro subscribers only).

Tesla is poised to report a blowout first quarter this week that might make it profitable enough to join the S&P 500, Barclays said in a note to clients.

Elon Musk's car company is slated to release its first quarter earnings after the bell on Wednesday, and Barclays is more bullish about the results than most of Wall Street.