BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
Investing.com - Barclays (LON:BARC) maintained its Equalweight rating and $275.00 price target on Tesla (NASDAQ:TSLA), currently trading at $321.67, ahead of the company’s July 23 earnings report. According to InvestingPro data, Tesla commands a market capitalization of $1.04 trillion, trading at a notable P/E ratio of 169x.
The firm notes that Tesla faces "increasingly weaker fundamentals" with auto margins expected to improve quarter-over-quarter but remain "depressed versus prior years." This aligns with InvestingPro data showing current gross profit margins at 17.66%. Barclays forecasts a significant volume decline of approximately 10% for Tesla in 2025.
The current fundamental outlook contrasts sharply with earlier expectations, as consensus earnings per share estimates for 2025 have fallen from over $3.20 at the beginning of the year to $1.84 currently. InvestingPro analysis reveals 15 analysts have revised their earnings downwards for the upcoming period, with the stock currently trading above its Fair Value.
Despite these concerns, Barclays indicates the upcoming earnings call presents "an opportunity for Tesla’s robotaxi/AV narrative to shine," with CEO Elon Musk potentially discussing fleet growth targets or expansion plans that could positively impact investor sentiment.
The firm also notes Tesla’s forthcoming low-cost model appears to have missed its target for first-half 2025 production start, with Barclays suggesting the company may delay the launch to the fourth quarter as it focuses on third-quarter sales ahead of the September 30 expiration of the US electric vehicle tax credit.
In other recent news, Tesla is preparing to launch a new six-seater Model Y L in China this fall, as confirmed by regulatory filings and the company’s announcements. This model is specifically designed for the Chinese market, expanding Tesla’s lineup tailored to regional preferences. Meanwhile, Cantor Fitzgerald has reiterated its Overweight rating on Tesla, setting a price target of $355.00. This comes despite Tesla’s Q2 2025 vehicle deliveries of 384,122, which met analyst consensus but fell short of last year’s figures. Production numbers also came in below expectations, with 410,244 vehicles produced, compared to an anticipated 434,227. The energy storage segment deployed 9.6 GWh, missing the expected 11.8 GWh but showing a slight increase from the previous year. Additionally, Tesla plans to open its first showroom in Mumbai on July 15, marking its entry into the Indian market. The company is set to revisit its 2025 guidance during its upcoming Q2 earnings call, having previously projected growth in its automotive and energy segments.
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