Here's what every major Tesla analyst says about its second-quarter earnings

Published Tue, Jul 27 20216:17 AM EDTUpdated Tue, Jul 27 20217:44 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Telsa's second quarter saw the company pass $1 billion in net profit for the first time and beat estimates on the top and bottom lines, but top Wall Street analysts had a tepid reaction to the report. The automaker reported on Monday afternoon net income of $1.14 billion for the period, its most profitable quarter on record. That equates to $1.45 in adjusted earnings per share on $11.96 billion in revenue. Analysts surveyed by Refinitiv were looking for 98 cents in earnings per share on $11.30 billion in revenue. Goldman Sachs analyst Mark Delaney, who has a buy rating on the stock, said in a note to clients that the record profit despite supply-chain issues was an example of the company's ability to keep expanding earnings. "We maintain our Buy rating on the stock, and we believe that Tesla's strong automotive gross margin this quarter despite multiple headwinds as well as the company's plan to materially grow capacity, are positive signs for Tesla's forward earnings potential," the note said. "We also continue to believe that Tesla's leadership in EVs (and its full ecosystem for clean transportation that includes a charging network, solar, and storage) and automotive technology positions it well long-term." Delaney also moved his price target on the stock to $875 from $860. Several other analysts also made minor tweaks to their price targets. The stock rose modestly, by Tesla standards, after the beat. Shares were up 2.2% in premarket trading Tuesday. Barclays analyst Brian Johnson, who has an underweight rating on the stock, said in a note that the beat appeared "relatively clean" but that the lack of clarity around timelines for new factories in Texas and Germany created growth concerns. "The stock did not follow through on the beat in after-hours trading. To us, while value investors may value the quarter, they are probably not the type of investors willing to pay over half a trillion for a carmaker; rather it's the growth investors, who had many of their hopes dashed, that have supported TSLA's valuation and may be reconsidering," the Barclays note said. Here's what other top analysts said about Tesla's earnings: Jefferies - Hold, $700 price target 'Solid Q2 surprise, with record clean margins and a solid sequential ASP (average selling price) recovery even ahead of new Model S/X ramps. Outlook unchanged but sounding more confident despite continuing supply chain issues. FY consensus looks quite conservative." Piper Sandler - Overweight, $1,200 price target "TSLA shares are up modestly in after-hours trading, following Q2 results that compared favorably vs. consensus. This stock remains one of our higher-conviction longterm holdings, with meaningful upside stemming from growth in market share, full selfdriving (FSD) software, and underappreciated opportunities in the Energy business." Evercore ISI - In line, $650 price target "If this was Elon's last regular EPS call to participate in…it was a GOOD ONE! TSLA's margins are moving in the right direction. ... .Given Revenue scaling in coming years, this should drive an industry leading high-teens margin business (before any help from FSD software potential). ... . Next potential TSLA catalyst clearly Biden EV credits." Wells Fargo - Equal weight rating, price target to $660 from $590 "The company largely maintained guidance as it continues to see greater than 50% growth in 2021. TSLA still expects both the Austin and Berlin plants to start production before year-end. CEO Musk indicated he may not regularly participate in earnings calls going forward unless there is an important announcement. The stock is trading up post market reflect the auto margin driven beat." JPMorgan - Underweight, price target to $180 from $160 "As we have written before, however, Tesla's high valuation leaves little room for less-than perfect execution, as evidenced by a relatively tepid reaction in the aftermarket Monday to what was a fairly sizable EBIT beat, and we did see some less than perfect takeaways, including: the official delay of the Tesla Semi into 2022 (albeit likely already almost entirely baked in); the seeming delay of the Cybertruck from late 2021 into 2022 (likely mostly baked in)." Bank of America - Neutral price target to $800 from $750 "While TSLA is clearly a trailblazer in the EV market and has successfully differentiated itself as an EV incumbent versus newer EV entrants, TSLA's operating environment is shifting from that of a vacuum to an increasingly crowded space. And while it remains to be seen whether or not TSLA will be dominant over the long-term, we continue to believe that as long as the company can fund outsized growth (new model introductions, capacity installation, etc.) with little to no cost of capital, as it has over the past decade, its high stock price will be justified." Citi - Sell, $175 price target "The quarter again demonstrates Tesla's strong execution in a volatile operating environment, though some of the factors driving Q2 margin upside appear common across automakers this quarter. Outside of the numbers, we thought some of the updates on the call weren't as positive—including with regard to FSD status/timing—FSD being a key component of our current risk/reward assessment on the stock. Net-net, our initial impressions are mixed as Q2 delivered strong financial performance but with company updates that likely won't change the LT bull/bear debate all that much." RBC - Sector perform, price target to $745 from $718 "In what could be Elon's last EPS call (except for important announcements), margin performance very impressive and adds upward pressure to our forecast. This is offset by product pushout/lower volumes relating to 4680, Semi, Cybertruck." Credit Suisse - Neutral, $800 price target "The clear highlight of the Tesla 2Q print was a strong gross margin in the face of challenging supply chain issues – Tesla's best auto gross margin ex credits since 1Q'17. The gross margin strength is a reminder of the lever Tesla has to eventually reduce prices so as to spur volume higher. ... Nevertheless, with the supply issues likely transitory, we ultimately believe the stock should be rewarded post the print on the back of the margin strength." Cowen - Market perform, $562 price target "Tesla had solid execution during 2Q21 given the tough macro backdrop and chip shortage. ... As is usual, all will come down to the 10-Q review which provides more insight. Musk electing not to be on future earnings calls will be an investor and media focus. All in all, a good quarter with some noise. Bernstein - Underperform, $180 price target "We continue to struggle to justify TSLA's valuation, which is higher than all other major auto makers combined and appears to imply huge volume AND industry leading profitability going forward, which is historically unprecedented." Goldman Sachs - Buy, price target to $875 from $860 "We maintain our Buy rating on the stock, and we believe that Tesla's strong automotive gross margin this quarter despite multiple headwinds as well as the company's plan to materially grow capacity, are positive signs for Tesla's forward earnings potential. We also continue to believe that Tesla's leadership in EVs (and its full ecosystem for clean transportation that includes a charging network, solar, and storage) and automotive technology positions it well long-term." Morgan Stanley - Overweight, $900 price target "Likely direction of Tesla estimates is modestly higher, but we do not see a significant change in narrative for bulls or bears. We note that of our $900 PT, roughly 40% is related to the 'core auto' business while nearly 60% is driven by Tesla's existing business and emerging opportunity in energy, mobility/ride-share, insurance, 3rd party battery/powertrain and network services." Canaccord - Buy, price target to $768 from $812 "Tesla delivered a surprisingly strong Q2. We are maintaining a BUY rating as our multi-year thesis of Tesla's strategic move to dominate the solar and energy storage market comes into focus." Mizuho - Buy, price target to $825 from $820 "Reiterating Buy and raising PT to $825 as we continue to see TSLA and NIO well positioned in a secular EV market as legacy original equipment manufacturers struggle to balance portfolios between ICE and EV. Good JunQ with solid volumes, even with supply chain headwinds." Baird - Outperform, price target to $764 from $736 "Tesla reported 2Q21 that should embolden long-term bulls given the material margin leverage shown despite multiple headwinds in the quarter. As the world shifts to EVs and battery storage, Tesla continues to not only show revenue growth but margin and earnings leverage along the way."

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020.

Johannessen-Koppitz | Bloomberg | Getty Images

The automaker reported on Monday afternoon net income of $1.14 billion for the period, its most profitable quarter on record. That equates to $1.45 in adjusted earnings per share on $11.96 billion in revenue. Analysts surveyed by Refinitiv were looking for 98 cents in earnings per share on $11.30 billion in revenue.