Was Tesla’s Latest Earnings Report Bullish or Bearish? Analysts Weigh In

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August 4, 2016 12:03pm NASDAQ:TSLA

teslaElectric car giant Tesla Motors Inc (NASDAQ:TSLA) reported earnings yesterday after the bell, and its results were hard to decipher. Here are some analysts’ thoughts to help you put the pieces together.

UBS is Ultra Bearish
Analysts at UBS hated the report, citing pressure on its product mix. While noting produce mix is the right issue to be addressing, it’s the wrong quarter to do so. The firm slapped a Sell rating and $160 downside price target on the stock, suggesting it could fall 29% from current levels.

Dougherty & Company is Ultra Bullish
Analysts at Dougherty absolutely love the stock, but were tepid on the report itself. The firm noted results were mostly in-line, but expressed concern about Tesla’s higher spending. Dougherty adjusted earnings estimates to account for rising operating expenses and a temporary shift to more direct leasing of its vehicles. Still, the firm reiterated its Buy rating and $500 price target, which suggests a 122% upside.

RBC Capital is Ambivalent
RBC Capital Markets said its takeaways from the earnings call were:

  1. Management’s improved tone, with “production hell” probably now behind them.
  2. Capital spending and investment will accelerate.
    • The firm also noted that the stock tends to move more on sentiment than anything, and sentiment is dead in the middle right now. RBC kept its Sector Perform rating in tact, noting that they can’t recommend adding to positions now, given a mismatch between the near-term risk and longer-term payoff.

      Other concerns included the success of the Model 3 launch, integration of SolarCity, and how those two issues might cannibalize each other.

      Tesla shares were mostly flat in Thursday afternoon trading at $225.25 per share. The stock has fallen 6.36% year-to-date, but is up more than 50% from its 52-week low of $141.05 hit back in mid-February.


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