Barclays Analyst Dan Levy Sets Expectations
With the EV sector experiencing a resurgence over the past quarter, Tesla investors have been riding a high, witnessing a remarkable 66% surge in share price. The optimism stems from Tesla’s robust Q2 delivery numbers surpassing Wall Street estimates, Elon Musk’s successful compensation package approval, and anticipation for events like Robotaxi Day, despite some delays.
Challenges in the Horizon
Barclays analyst Dan Levy, while acknowledging these positive developments, cautions that Tesla’s forthcoming Q2 results could bring challenging fundamentals back into focus. An unimpressive earnings report could swiftly reverse the stock’s recent fortune. Levy foresees a potential downturn, expecting a Q2 miss on Auto GM% with a margin of 16.0%, a sequential decrease to a new trough.
Balance of Optimism and Realism
Levy notes the current market enthusiasm surrounding Tesla’s “AV/AI pivot” but highlights that any weakness in margins and fundamentals might only lead to temporary setbacks. However, he underscores that long-term success hinges on substantial enhancements in Tesla’s fundamentals, especially with uncertainties persisting around when these improvements will materialize.
Price Target and Market Views
Despite maintaining a Neutral rating on Tesla stock, Levy has raised his price target to $225, implying a potential 10% downside in the following months. This target, although higher than the Street’s average of $193.18, suggests a 22.5% forecasted drop in Tesla’s value over the upcoming year. The consensus Hold rating is based on a mix of Buy, Hold, and Sell recommendations.
For investors seeking undervalued stocks, TipRanks provides insights into the Best Stocks to Buy. Remember, it is crucial to conduct personal research before making any investment decisions.
