Will Tesla exceed Wall Street expectations 7 times in a row? πŸš—

US electric car maker Tesla (TSLA.US), led by Elon Musk, will report financial results for the third quarter of the year today. Tesla shares are down 36% year-to-date, but are trading up 2% ahead of the open:

Turnover: $21.96 billion according to Refinitiv (60% annual growth)

Earnings per share (EPS): $1 according to Refinitiv (60% increase y/y)

  • Analysts’ expectations are inflated again, as the company recently announced third-quarter production of 365,923 vehicles (53% year-on-year growth). Deliveries also hit a record high, the company said, with 343,830 vehicles delivered in the third quarter (42% year-on-year growth). Investors will see if Tesla beats Wall Street estimates for the seventh straight quarter and responds to tough market conditions;
  • The other forecasts that the company will publish during the presentation of its report will be equally important. The average selling price of the Model 3 in the United States has increased by 24% since January 2021, the report will show if the price increase of the company’s electric vehicles can offset any drop in demand for cars and the problems facing it. confronted the automotive sector in an environment of record inflation and more expensive financing.
  • Elon Musk, who always presented the company with bold challenges that he shared with the market, caused Wall Street to start “pricing” Tesla’s business at a very high price. The billionaire’s appetite for Tesla’s success clearly isn’t waning, but in an unfavorable macro environment the company could find it harder to meet its own exorbitant goals. In a negative scenario, it could depress the stock’s valuation and dampen the powerful optimism around the company’s stock that has lasted since 2020, and that is what Wall Street fears. Analysts expect the report to detail planned and ongoing supply chain disruptions, logistics and personnel issues that Tesla has faced recently.
  • Tesla’s second-quarter shipments were up 27% year-over-year and were all the stronger given the Shanghai plant shutdown. There was no similar interruption this quarter, so we can expect an increase in deliveries. The Shanghai plant ended the second quarter with record production growth, which is expected to be beaten. Its annual capacity should reach 750,000 vehicles. Optimistic investors are betting that demand will confirm the validity of Tesla’s recently increased production. Ultimately, the company plans to increase vehicle deliveries by up to 50% over the next few years.
  • The electric car market is fundamentally forward-looking, with analysts expecting a CAGR of up to 20% through 2030. Major automakers are trying to catch up with Tesla. At the same time, however, the current difficult market environment could slow the development towards electric vehicles. The company currently controls around 70% of the electric car market.

Demand for Tesla’s most popular models in the United States is slowing sharply amid negative macroeconomic factors, fueling analyst concerns. Source: Refinitiv

So far, Tesla has done well to beat expectations for expected earnings per share (EPS) from Wall Street on a continuous basis since the first quarter of 2021. The company’s last weakness was in the last quarter of 2020. Source: Reuters

Tesla stock chart (TSLA.US), interval D1. The stock price showed weakness as the 50 SMA attempted to breach the 200 SMA in September. Caution remains in order given that Elon Musk is selling Tesla shares to finance the billionaire’s acquisition of Twitter for $44 billion. Source: xStation

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