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- Tesla is set to report first-quarter earnings on Monday as investors seek to quantify the impact of global chip shortages on the auto-makers business.
- First-quarter deliveries already exceeded analyst estimates and some think Tesla can deliver up to 900,000 vehicles in 2021.
- Detail below is what four Wall Street analysts expect from Tesla's first-quarter earnings report.
- Watch Tesla trade live here.
Tesla will report its first-quarter earnings after the market closes on Monday, and all eyes will be on guidance as the company grapples with a shortage in semiconductors.
The company already reported first-quarter deliveries earlier this month, which exceeded analyst expectations. The company said it delivered 184,800 vehicles in the quarter, representing a new record. Most of those deliveries consisted of the Model 3 and Model Y, rather than the higher-priced Model S and Model X.
The average analyst estimate for Tesla's upcoming earnings report includes revenue of $10.3 billion and earnings per share of $0.79, according to data from Yahoo Finance.
As a whole, Wall Street remains skeptical on Tesla despite its ramping up of vehicle production over the past year. The company currently has only four buy ratings, eight hold ratings, and seven sell ratings among analysts.
Detailed below is what four Wall Street analysts expect from Tesla's first-quarter earnings report.
JPMorgan: 'Remain cautious on lofty valuation'
Tesla's strong first quarter deliveries already spurred JPMorgan to increase its earnings estimates for the company earlier this month. But the bank remains cautious on Tesla, assigning the company an Underweight rating and price target of $155, representing downside potential of 78% from Friday's close.
"While our blended price target of $155 implies -79% downside, we do not regard it as ungenerous as it actually values Tesla as the world's second largest automaker by market capitalization, behind Toyota and roughly tied with Volkswagen despite the automakers each currently selling on the order of magnitude of 15-20x as many vehicles annually as Tesla," JPMorgan said.
"Tesla's current valuation appears to us to insufficiently incorporate what is likely to be greatly intensified competition in the market for battery electric vehicles and leaves little room for less than perfect execution," JPMorgan concluded.
Credit Suisse: 'Upside likely from regulatory credits'
Credit Suisse is ahead of consensus expectations for Tesla's first-quarter earnings report, and sees three key themes that investors will focus on.
"Launch of new capacity remains most critical, especially in Europe," Credit Suisse said, adding that Tesla's Berlin factory is of highest priority as it enables Tesla to capitalize on the electric vehicle opportunity in Europe.
"1Q delivery beat reinforces upside on 2021 deliveries," Credit Suisse said. The bank expects Tesla to deliver 929,000 vehicles in 2021, well ahead of consensus estimates of 831,000. "We expect benefit from continued ramp of China production, industry strength in US and China, and as the launch of the Berlin and Austin facilities in 2H21," Credit Suisse said.
"Gross margin could see little upside, but investors would look past any softness," the bank said, adding that volume strength in the quarter will likely be offset by cost inefficiencies, a negative mix of model sales, and a reduction in vehicle prices.
Credit Suisse maintains a Neutral rating for Tesla and a price target of $800.
Wedbush: 'Expecting good news from Musk and Co.'
Wedbush analyst Dan Ives thinks Tesla will easily be able to beat Wall Street estimates for its first-quarter earnings given the company's strong Q1 deliveries "and tight expense controls seen in Fremont."
"The street is now laser focused on gauging the annual delivery trajectory for 2021... which we expect to drive the stock much higher over the coming months," Ives said.
"We now believe Tesla could exceed 850,000 deliveries for the year with 900,000 as a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector," Wedbush said.
"We believe the tide is turning on the Street and the 'eye popping' delivery numbers coming out of China cannot be ignored with the trajectory on pace to represent ~40% of deliveries for Musk & Co. by 2022," Ives concluded.
Wedbush maintains an Outperform rating for Tesla and a price target of $1,000.
RBC: 'We expect some supply chain issues'
RBC tweaked its first-quarter earnings estimates for Tesla following the release of its delivery figures earlier this month. RBC expects $10.5 billion in revenue for the quarter, which is lower than its previous estimate due to lower deliveries of the Model S and X, which command higher prices and profit margins.
RBC's estimates include $400 million in regulatory credits, which Tesla sells to other automakers that don't produce enough electric vehicles based on government mandates.
"On the call, we believe the items that will be in focus are auto-gross margins, free cash flow, capacity expansion updates, product updates and commentary about the impact of the semi-shortage to 2021 deliveries," RBC said.
The firm lowered its 2021 delivery estimates to 825,000 from 860,000, "given we expect some supply chain issues," RBC said. RBC maintains a Sector Perform rating for Tesla and a price target of $725.