TSX runs higher on rate cut expectations
Investing.com -- Barclays says Tesla (NASDAQ:TSLA) shares could outperform following second-quarter results, even as the company faces “increasingly weaker fundamentals.”
In a research note, Barclays (LON:BARC) described the setup as “confusing” but stated that it has upside potential.
“Net net we see potential for the stock to outperform,” the analysts wrote, highlighting investor focus on Tesla’s long-term robotaxi ambitions.
Barclays explained that “the earnings call also presents an opportunity for Tesla’s robotaxi/AV narrative to shine,” adding that “we could see Elon Musk potentially discussing fleet growth targets or expansion plans.”
Tesla is expected to post a slight sequential improvement in auto gross margin excluding regulatory credits, but Barclays warned that it “will likely remain depressed vs prior years.”
The firm forecasts a 10% drop in Tesla’s 2025 vehicle volume, calling the first half of the year “soft” and pointing to a significant decline from 2024 expectations. “Whereas ’25 consensus EPS was over $3.20 into the beginning of the year, it is now down to $1.84,” the note said.
The expected delay of Tesla’s low-cost model could also weigh on sentiment. Barclays wrote that “Tesla likely to focus on a 3Q pre-buy in advance of the Sep 30 expiration of the U.S. EV tax credit,” and as a result, “may delay the launch of the low-cost model to 4Q, which could be perceived negatively.”
Still, Barclays believes the company’s autonomous vehicle narrative could overshadow weaker fundamentals in the near term.