Here’s How Much Traders See Tesla Stock Moving After Earnings

Key Takeaways

• Tesla’s next earnings report is set to be released Wednesday afternoon, with traders anticipating more volatility from the EV maker’s stock following the report.

• Sales and profits are projected to have grown in the second quarter, but investors could be more focused on Tesla’s long-term projects.

Tesla is scheduled to report earnings after markets close on Wednesday, with traders anticipating a big move from the EV maker’s stock.

Tesla (TSLA) shares are seen swinging up to about 7% in either direction by the end of the week following the results, based on recent options pricing. A move of that size from Thursday’s close could see the shares sink as low as $365, or rise above $416, recovering some of their recent losses.

Tesla shares are more than 10% off where they started the year, amid lingering uncertainty around the company’s transformation effort and speculation around a potential merger with SpaceX (SPCX), another Elon Musk-led company that went public last month and recently slipped below its IPO price.

Why This Matters to Investors

Tesla is in the midst of a transformation to focus its business on physical applications of AI, including fully autonomous vehicles and humanoid robots.

Morgan Stanley analysts recently lifted their price target to $417 from $415, and said they see Tesla turning in a solid second quarter, but that investors will likely be more focused on updates to long-term projects. The analysts said the “key investor debate remains unchanged: can Robotaxi and Optimus progress quickly enough to justify an accelerating AI investment cycle?”

Tesla is expected to report second-quarter revenue of about $26.54 billion, up 18% year-over-year, along with adjusted earnings of 55 cents per share, up 15 cents from the same quarter a year ago. Earlier this month, Tesla topped delivery estimates as the EV maker’s sales improved in the first half of the year after Tesla posted two straight years of declining sales.

Tesla’s stock remains a divisive one on Wall Street, with the 11 analysts tracked by Visible Alpha split between six neutral and four “buy” ratings, along with one recommendation to sell the stock. Their targets range from $130 to $600, with an average target of $408, suggesting upside of just 4% to Thursday’s close.

Read the original article on Investopedia