In 2021, the stock is down more than 7%, and it is down about 27% from its January 52-week high.
Due to supply shortages, automakers across the industry faced higher input costs, and Tesla was no exception. To offset rising costs, the company raised prices.
Despite the supply chain challenges, Tesla announced 201,250 vehicle deliveries in the second quarter, the first time the electric vehicle manufacturer exceeded 200,000 in a three-month period.
The strong delivery figure provided Wall Street analysts with a foundation as they look for insights into the company’s key business areas in the second quarter earnings.
“This appears to be a relatively uninteresting financial earnings report for TSLA. “The fireworks appear to be more focused on the commentary and updates Tesla provides on the call,” said Joseph Spak of RBC Capital Markets.
Analysts predict the following Tesla earnings:
Analysts anticipate learning more about Tesla’s operations in China, a key market for the company. Tesla has had issues with its brand’s reputation in the country in recent months. In June, China’s vehicle safety authority announced a voluntary recall of approximately 285,000 Tesla vehicles via software update due to reported issues with driver-assistance systems.
′′[W]e anticipate Tesla’s upcoming earnings report will also provide investors with an update on the trend in sales in China (following several high-profile product quality and customer relations issues in that country during the quarter),” wrote JPMorgan’s Ryan Brinkman.
Tesla’s bitcoin holdings will also be a major factor in the company’s second-quarter earnings report. The cryptocurrency market has been volatile, with bitcoin briefly falling below $30,000 in June before surging above $39,000 on Monday.
“At any time, the impact of bitcoin will be determined by the definition of fair value. We see no impairment at closing, but at intraday lows, we see a $104m ($0.09) impairment… “Any impairment would be viewed as one-time,” said Colin M. Langan of Wells Fargo in a note.
Analysts are also interested in hearing about Tesla’s full self-driving capability and new manufacturing facilities in Berlin, Germany, and Austin, Texas.
JPMorgan is rated as underweight.
“In addition to the now well-known trend in deliveries, we anticipate Tesla’s upcoming earnings report will provide investors with an update on the trend in sales in China (following several high-profile product quality and customer relations issues in that country during the quarter), as well as the Model S Plaid launch in the United States. We will also be looking for clues about how Tesla is dealing with the current inflationary environment.”
Wedbush has an outperform rating.
“After a Cinderella story ride for Tesla (and the bulls) last year, shares have underperformed this year as a result of a trifecta of: 1) increasing EV competition, 2) China PR/safety issues negatively impacting demand, and 3) the chip shortage overhang. Despite these headwinds, Tesla impressively hit 200k+ deliveries in the June quarter and appears to be on track to possibly hit 900k for the year, with a stronger second half on the way, in our opinion.”
Credit Suisse has a rating of neutral.
“Perhaps the most important thing we can learn on the call is updated timing on the launch of new capacity, particularly in Europe…
[W]e believe Tesla’s primary focus in 2021 will be capacity expansion, which will help to unlock additional volume growth. We estimate Tesla will exit 2021 with installed capacity of 1.44 million units, up from 1.05 million now, thanks to expansion in Shanghai and new facilities in Texas and Berlin.”
Wells Fargo — Rating of equal weight
“Our estimated $230/vehicle raw mat headwind should be more than offset by the Q2 price increases. Higher used pricing should benefit servicing once more. At any time, the impact of bitcoin will be determined by the definition of fair value. We see no impairment at closing, but at intraday lows, we see a $104m ($0.09) impairment… Any impairment would be considered a one-time occurrence.”
UBS has a neutral rating.
“The main positive margin drivers during the quarter were: higher volumes q/q, higher contribution from made-in-China Model Y, and price increases in the United States and Europe, whereas the low contribution from the re-launched Model S & X (which began mid-June) was a negative driver.” Tesla’s comments during the Q2 call on the timing of the ramp-up in Berlin and Austin, Tesla’s proprietary 4680 battery, and the launch of [full self-driving] (the latter two are running behind schedule) will be even more relevant to the share price over the next few quarters.
RBC Capital Markets has a sector performance rating.
“This appears to be a relatively uninteresting financial earnings report for TSLA. The fireworks appear to be focused on Tesla’s commentary and updates on the call. We are particularly interested in China and [full self-driving]. In our opinion, China remains an increasing and underappreciated risk.”
Outperform rating from Oppenheimer
“With TSLA delivering vehicle volumes that are largely in line with expectations, we believe there are a number of areas of significant interest for investors.” First, we’re looking for signs of progress on its manufacturing capacity in Berlin and Austin. Second, we anticipate that geographic and feature mix, as well as the ability to pass on higher supply chain costs to consumers, will drive margins. Third, we believe that future share price appreciation is predicated on the successful implementation of incremental self-driving functionality toward full self-driving performance in urban environments.”
Deutsche Bank — Buy recommendation
“In the medium term, we continue to believe Tesla’s impressive target trajectory for its battery technology, capacity, and, most importantly, cost could help accelerate the world’s shift to electric vehicles and significantly extend Tesla’s EV lead. In-house cell manufacturing efforts are on track, with cells expected to be at target quality by the end of this year and a large-scale ramp-up of cell capacity over the next 12-18 months.”
Mizuho — Buy recommendation
′′[W]hile we believe TSLA may face competition from legacy automakers such as VW, Ford, and Mercedes, we believe TSLA’s lead remains unrivaled, with 1H′21 deliveries up 115 percent year on year at 385k units vs VW’s ID.3/4 estimated at 65-70k. With a vertically integrated battery, software, and hardware roadmap, TSLA remained the global BEV market share leader in MarQ, with a 24 percent share.”