Nasdaq TSLA Tesla

Earnings season picks up this week with over 300 companies expected to report earnings.

Earnings season has finally arrived, and investors are eager for companies to finally pull back the curtain and reveal what has happened behind the scenes.

Earnings season has finally arrived, and investors are more than anxious for companies to finally pull the curtain back and unveil what has transpired behind the scenes.

Twitter Inc has frozen equity award accounts for employees days ahead of the deadline to close its deal with Elon Musk, Bloomberg News reported on Tuesday, a sign that the social media firm hopes the deal will be completed.

U.S. rapper Kanye West, who now goes by Ye, has agreed in principle to buy social media platform Parler, which is popular among U.S. conservatives, the app's parent company said on Monday.

Twitter Inc has frozen equity award accounts for employees days ahead of the deadline to close its deal with Elon Musk, Bloomberg News reported on Tuesday, a sign that the social media firm hopes the deal will consummate.

What happened Shares of Tesla (NASDAQ: TSLA) were up as high as 4.8% this morning before cooling off by the afternoon. As of 12:37 p.m. ET on Tuesday, the stock was still holding a 0.70% gain on the day, slightly trailing the broader market. Year to date, the stock has fallen 37%

Tesla Inc's quarterly report on Wednesday will likely show whether the Elon Musk-led electric-vehicle maker is facing any weakness in demand that is starting to weigh on the wider auto industry.

Executives who sell or use business jets expressed concern that a French proposal to tax corporate aircraft over greenhouse gas emissions is making their industry a "scapegoat," following protests by climate activists in Europe.

Electric carmaker Tesla Motors TSLA is scheduled to report third-quarter 2022 results on Oct 19 after market close. Let’s take a closer look at its fundamentals ahead of the earnings release.Tesla has shed about 9% over the past three months but outperformed the industry’

Tesla topped registrations of battery-electric vehicles in Germany in the first nine months of this year at nearly 38,500, federal data showed, beating the Volkswagen brand by around 6,000 vehicles.

Shares of electric vehicle (EV) makers have significantly declined this year due to fears of a global economic downturn and macroeconomic challenges. However, several analysts are looking beyond the near-term headwinds and focusing on the solid demand backdrop for EVs. Using TipRanks’ Stock Comparison Tool, we placed Li Auto (NASDAQ:LI), Tesla (NASDAQ:TSLA), and Nio (NYSE:NIO) against each other to pick the EV stock that Wall Street expects to generate the highest returns.

Aside from growing demand, EV makers are also expected to benefit from the favorable policies being implemented by several countries, like the Inflation Reduction Act (IRA) in the U.S., to boost EV adoption.

Li Auto (NASDAQ:LI)

The impact of China’s Zero COVID policy on the supply chain and production of EV makers was immense, and Li Auto was no exception. Last month, the company disappointed investors when it lowered its Q3 delivery outlook to 25,500 vehicles from the previous outlook range of 27,000 to 29,000 units, citing supply chain disruptions.

However, earlier this month, Li Auto reported Q3 deliveries of 26,524 vehicles, which reflected a 5.6% year-over-year growth and was better than the company’s estimate, thanks to the strong rebound in September and the robust demand for L9 SUVs. The company also disclosed that it received positive feedback for its latest models – the Li L8 and Li L7. The delivery of Li L8 is expected to begin in November, and that of Li L7 will start in Q1 2023.   

Is Li Auto Inc. Stock a Buy?

Following the launch of the L8 SUV, Goldman Sachs analyst Fei Fang stated that he feels Li Auto stands apart from the broader China auto industry due to its innovative EV models.

Fang stated, “The success of Li ONE illustrates the company’s understanding of consumer needs, operational capability as well as brand establishment, and it is leveraging these to its next generation products of EREV/BEV models with evolving autonomous driving technologies.”

Fang reiterated a Buy rating on Li Auto stock with a price target of $46.

Li Auto stock scores the Street’s Strong Buy consensus rating based on seven unanimous Buys. The average LI stock price target of $73.29 implies a whopping 287% upside potential. Shares have tanked 41% year-to-date.

Tesla (NASDAQ:TSLA) Stock

Tesla’s upgrade to its Shanghai facility helped it bounce back strongly after COVID-led lockdowns disrupted the company’s production. The EV pioneer produced 365,923 vehicles in the September quarter. However, Q3 deliveries of 343,830 vehicles failed to surpass the Street’s estimates.

The company is scheduled to announce its Q3 results after the markets close on October 19. Analysts expect Q3 revenue to grow nearly 60% year-over-year to $21.96 billion, while EPS is expected to increase 63% to $1.01 (EPS figure of $0.62 for the prior-year quarter takes into account the 3:1 stock split).  

Is Tesla a Buy Right Now?

Goldman Sachs analyst Mark Delaney prefers Tesla and General Motors (GM) due to their advanced driver-assistance system (ADAS)/Autonomous Vehicles (AV) technology and the benefits of the IRA.

Delaney expects Tesla’s 4Q deliveries to come in at 461,000, which is above the Street’s forecast of 425,000 to 450,000. He expects Tesla to gain from a strong order backlog and improving supply chain. However, Delaney cautioned that volumes might be impacted by slowing global demand due to macro pressures and the possibility of some U.S. customers delaying purchases until 2023 to utilize the IRA benefits.

Overall, Wall Street is cautiously optimistic about Tesla stock with a Moderate Buy consensus rating based on 19 Buys, seven Holds, and four Sells. The average TSLA stock price target of $325.34 suggests upside potential of 48.3%. TSLA stock has plunged nearly 38% so far this year amid a broader market sell-off and the distraction surrounding the Musk-Twitter deal.

Nio (NYSE:NIO) Stock

Like its other EV peers, Nio ramped up its production after the easing of COVID-19 restrictions in China. Earlier this month, the company reported deliveries of 10,878 vehicles for September, which reflected a 1.9% increase compared to August and year-over-year growth of 2.4%.     

Overall, Nio’s Q3 deliveries surged 29.3% to 31,607 vehicles but fell short of the midpoint of the company’s guidance range of 31,000 to 33,000 vehicles.

Looking ahead, Nio looks well-positioned to gain further market share in China, driven by its new models, and expand rapidly into the European market. The company’s battery swap technology is also a major advantage.  

Is Nio a Buy or Sell?

On Monday, CFRA analyst Jian Xiong Lim expressed his optimism about Nio stock. Lim feels that the company’s EV portfolio expansion (three SUVs and two sedan models in 2022) will help in sustaining its revenue momentum and fuel an improvement in operating leverage.

However, Lim expects Nio’s earnings to continue to be in the red this year and next due to increased research and development spending, higher investments in battery swap/charging stations, and a rise in input and supply chain costs. That said, the analyst projects “net loss to moderate on improving operating leverage.”

On TipRanks, Nio stock scores the Street’s Strong Buy consensus rating based on seven unanimous Buys. At $31.80, the average NIO stock price target implies 160.4% upside potential following a decline of 61.5% so far this year.   

Conclusion

Despite fears of an impending recession, analysts continue to be optimistic about several EV names based on growing demand and favorable policies for the accelerated adoption of EVs. Currently, analysts are more bullish on Chinese EV makers Li Auto and Nio than Tesla. Based on the robust demand for Li Auto’s new vehicles, analysts see a higher upside in LI stock than in Nio and Tesla.

 Disclosure   

The NASDAQ 100 Pre-Market Indicator is up 250.63 to 11,313.16. The total Pre-Market volume is currently 54,182,581 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro QQQ (TQQQ) is +1.31 at $20.61, with 14,286,436 shares traded.

The global nickel market is expected to remain in deficit for a third straight year in 2023 on solid demand for battery, chip-making equipment and oil-well tubular, Sumitomo Metal Mining said on Tuesday.

HONG KONG (Reuters Breakingviews) - BYD’s, growth is belatedly turning heads. Investors drove the $93 billion company’s shares up around 5% on Tuesday after the company estimated its net profit nearly quadrupled in the quarter ending September comp

Electric vehicle (EV) maker Tesla (NASDAQ:TSLA) is scheduled to release its third-quarter results on October 19, after the market closes. Despite the COVID-19-related lockdowns in China during the quarter, Tesla’s China-made deliveries set a record. Also, Tesla’s overall Q3 production numbers exceeded expectations, but deliveries missed the same. Having said that, supply chain and logistic issues, and higher commodity prices could continue to hamper production and margins in the short run.

The Street expects Tesla to post an adjusted profit of $1.01 per share in Q3, In the prior-year comparative quarter, Tesla had reported adjusted profit of $1.86 per share (on a pre-split basis). Meanwhile, revenue is pegged at $21.96 billion, representing a whopping year-over-year jump of 59.6%, and 29.7% higher than Q2FY22 revenue of $16.93 billion.

Notably, the major overhang on Tesla stock remains CEO Elon Musk’s prolonged purchase of social media site Twitter (NYSE:TWTR).

An Analyst Cuts Price Target Ahead of Results

Ahead of the Q3 print, Wells Fargo analyst Colin Langan cut the price target of TSLA stock to $230 (4.9% upside potential) from $280, while maintaining a Hold rating. The analyst decreased the price target, owing to the higher weighted average cost of capital calculation driven by the high-interest rate environment.

Langan expects Tesla to post a marginal beat owing to a mix of price increases and currency headwinds. Nonetheless, the analyst believes Tesla will be the largest beneficiary of the Inflation Reduction Act (IRA) in the long term. Accordingly, he increased the earnings per share (EPS) projections in his model by an impressive 33% from 2023 through 2026. Moreover, Langan noted that if Tesla makes 900,000 EVs using U.S.-made batteries annually, it would lead to $2.8 billion in savings through tax credits.

Is Tesla Stock a Good Buy Right Now?

Wall Street analysts are currently split on TSLA stock’s trajectory due to a slew of reasons. On TipRanks, Tesla stock has a Moderate Buy consensus rating based on 19 Buys, seven Holds, and four Sells. The average Tesla price target of $325.34 implies 48.3% upside potential to current levels. Meanwhile, the stock has lost 45.1% year-to-date.

Ending Thoughts

Analysts and investors will be eager to hear any update on Tesla’s production and delivery progress in the Q3 conference call. Plus, any confirmation regarding the rumors of a proposed share buyback may be welcomed with enthusiasm. For now, the EV sector remains under pressure owing to the current headwinds. However, Tesla stands to benefit from the IRA and could continue to enjoy the leadership position over the long term.

Disclosure

Whether you believe Britain is a canary in the coalmine of global economic policy or just a idiosyncratic yarn of gross government missteps, world markets remain in thrall to the drama and how it could mark a turn in a relentlessly gloomy year.

Japanese stocks closed higher on Tuesday, supported by strong overnight Wall Street performance and positive indications from U.S. futures markets.

The chairman of Taiwan's Foxconn, the world's largest contract electronics maker, said on Tuesday that he hoped one day the company could make Tesla Inc cars for Tesla, as part of the company's push into making electric vehicles.

Investors are speculating about whether Monday's big stock surge is the start of a recovery or another pause in the market's decline, and the answer may depend in part on upcoming quarterly results from heavyweights including Tesla Inc, Johnson & Johnson and Netflix Inc.