Wall Street Is Optimistic About Tesla’s (TSLA) 3Q Earnings

Tesla Inc. (NASDAQ: TSLA) is scheduled to report 3Q’21 earnings on Wednesday, Oct. 20, after the closing bell.

The electric carmaker, which moved a total of 241,300 cars from July through September, a new record for the company representing 73% year-over-year (y/y) growth, is expected to post profits of $1.54 per share, on revenues of $13.7 billion, which would compare with $8.8 billion y/y. Meanwhile, earningswhisper’s number, or the Street’s unofficial view on EPS, stands at $1.65 per share.

In the previous quarter, the company reported earnings of $1.02, beating the Street’s average estimate of $0.52. In addition, revenue came in at $11.96 billion, surpassing expectations of $11.21 billion.

A boost in vehicle sales will most like translate to strong earnings growth during the third-quarter. In fact, Wedbush analysts Dan Ives expects an “across the board beat”. Ives, who currently maintains an ‘Outperform’ rating with a $1,000 price target on TSLA, says that despite the bottlenecks in memory chips he’s confident the e-car manufacturer would exceed consensus expectations.

“With the chip shortage a major overhang on the auto space and logistical issues globally, these delivery numbers combined with this week’s likely earnings beat speaks to an EV demand trajectory that looks quite robust for Tesla heading into 4Q and 2022,” Ives wrote, noting that Tesla could be on pace for a 2021 delivery total of around 900,000 units, a figure he sees jumping up to 1.4 million in FY22.

Goldman Sachs’ Mark Delaney in a recent note said that he expect “Tesla’s recently reported strong delivery numbers and higher vehicle pricing to more than offset any added costs from supply chain challenges (eg chip shortages, higher freight costs, and increasing commodity costs) in the quarter”.

A strong earnings print could boost investors’ confidence prompting ticker towards the $1,000 level.

Tesla will report its earnings from its newly-announced headquarters in Austin, Texas.

Price Action

In the last 52-weeks, shares of Tesla have gained more than 100% and are currently trading at over $870.

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