Tesla stock rating reiterated as Sell by GLJ Research ahead of Q2 earnings

Investing.com - GLJ Research has maintained its Sell rating and $19.05 price target on Tesla (NASDAQ:TSLA) ahead of the electric vehicle maker’s second-quarter earnings report due later today. According to InvestingPro data, analyst targets currently range from $115 to $500, with 16 analysts recently revising their earnings expectations downward.

The research firm expects Tesla’s Q2 results to be "largely in line" with consensus estimates, projecting revenue of $22.3 billion and non-GAAP earnings per share of $0.39, compared to consensus estimates of $22.6 billion and $0.42 respectively.

GLJ Research attributes the expected performance to several offsetting factors, including Bitcoin price gains and "aggressive FSD revenue recognition" balancing negative foreign exchange impacts and margin pressure from rate buy-downs.

The firm anticipates Tesla’s performance will improve in Q3 ahead of the $7,500 U.S. EV tax credit expiration at the end of September, but forecasts a significant decline in Q4 with revenue of $22.3 billion and non-GAAP EPS of $0.34, substantially below consensus estimates of $26.8 billion and $0.59.

GLJ Research predicts Tesla’s free cash flow will turn negative in Q4 2025 for only the second time since Q1 2020, which it suggests could concern long-term investors given the company’s current valuation at 178.4 times its 2025 estimated non-GAAP earnings.

In other recent news, Tesla reported its second-quarter vehicle deliveries for 2025, aligning closely with Visible Alpha consensus expectations. The company delivered 384,122 vehicles, slightly below the 443,956 vehicles from the same quarter last year. Production numbers for the quarter reached 410,244 vehicles, which was below the analyst consensus of 434,227 but consistent with the previous year’s production. Cantor Fitzgerald maintained its Overweight rating on Tesla, setting a price target of $335, following the delivery report. Additionally, Tesla introduced a series of discounts and incentives for U.S. customers in anticipation of expiring federal tax credits. These promotions include a $7,500 lease incentive, reduced monthly lease payments, and lower financing rates, along with free upgrades on select models. Wedbush reiterated its Outperform rating and a $500 price target, highlighting Tesla’s focus on AI and Robotaxi expansion. Piper Sandler also maintained its Overweight rating with a $400 price target, noting limited near-term impact on earnings from regulatory credit concerns.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.