Image Source: Unsplash

Tesla (TSLA) is expected to report results on its fiscal first quarter on Tuesday, July 23, with a conference call scheduled for 5:30 pm EDT. What to watch for:

SLIGHT BEAT: Commenting on the upcoming Tesla's Q2 earnings results, Wedbush says it expects it to be a slight beat versus the Street on the headline numbers with gross margins a major focus of investors. The firm believes the Tesla demand story has made a shift for the positive after a rough last 6 to 9 months, with stronger than expected Q2 deliveries earlier this month marking a major "turning point" in the Tesla bull case story looking ahead into the second half of 2024 and 2025. Wedbush maintains an Outperform rating on the shares with a price target of $300.

On Wednesday, Barclays raised the firm's price target on Tesla to $225 from $180 but kept an Equal Weight rating on the shares ahead of the Q2 report. Not only have Tesla's near-term fundamentals "been under question" amid demand pressures from an electric vehicle "winter," but the company has faced uncertainty from an investment thesis pivot - a shift away from growth driven by vehicle manufacturing, and instead emphasizing growth from autonomous vehicle businesses, the firm tells investors in a research note. Barclays says that while it appreciates the "potentially disruptive opportunity from these businesses," it believes they cast uncertainty on the path ahead for Tesla, making success of the stock dependent "on bets with seemingly binary outcomes."

BUYER INTO Q2 REPORT: Baird is a buyer of Tesla shares into the company's Q2 earnings report, keeping an Outperform rating on the name with a $280 price target. The firm likes the setup and thinks there is a high probability of an earnings beat. A more stable pricing environment during the quarter, higher revenue from full self-driving, and the "large beat" in its Energy segment all support a solid quarter, Baird tells investors in a research note. The firm also sees the Robotaxi event as a positive catalyst for the stock. It thinks Tesla is likely to deploy its own Robotaxi fleet in limited cities to begin the rollout.

NOT AN EASY QUARTER TO MODEL: GLJ Research raised the firm's price target on Tesla to $24.86 from $22.86, while keeping a Sell rating on the shares ahead of tonight's Q2 report. While stating that Q2 is "not an easy quarter to model for Tesla," the firm is modeling non-GAAP EPS of 57c versus a consensus estimate of 60c, explaining it is expecting "a modest miss."

MORE BEARISH ON THE NAME: Earlier this month, UBS downgraded Tesla to Sell from Neutral with a price target of $197, up from $147. The stock's valuation premium has widened of late on artificial intelligence enthusiasm, the firm told investors in a research note. UBS added that after going through the different businesses it can more substantially value, at current levels, it is still left with an over $500B "stub" for Tesla's future growth. Even if giving that "stub" a five-year time horizon, that implies a five-year future value of $1 trillion. And this is just to justify current share levels, investors would need to see an even larger opportunity to justify a Buy rating, contends UBS. Citing the lack of visibility and the risk that Tesla's growth opportunities materialize on a longer time horizon, or not at all, the firm downgrades the stock to Sell following the recent share rally.

Q2 DELIVERIES: Tesla said that in the second quarter, the company produced approximately 411,000 vehicles and delivered approximately 444,000 vehicles. Tesla deployed 9.4 GWh of energy storage products in Q2, the highest quarterly deployment yet, the company added.

More By This Author:

Here's What Wall Street Experts Are Saying About These Media Names Ahead Of Results
Here's What Wall Street Experts Say About These Automakers Ahead Of Earnings
Ardent Health Slips After Downsized IPO