TLDR
- Tesla stock increased 1.4% to $435.15 Wednesday ahead of Q3 earnings due October 22
- Q3 deliveries hit record 497,099 vehicles, crushing analyst expectations of 445,000 units
- Analysts project Q3 earnings of 55 cents per share, down from 72 cents year-over-year
- New Standard Model 3 and Model Y variants launch at $5,000 less than Premium versions
- Melius Research initiated coverage with buy rating and $520 price target
Tesla stock gained 1.4% to $435.15 Wednesday as traders prepared for the company’s third-quarter earnings report. The electric vehicle maker will release results after market close on October 22.
The stock has shown strong momentum recently. Shares jumped 38% over the past three months.
Tesla is up 6% year to date. Over the trailing 12 months, the stock has climbed 95%.
Wall Street expects third-quarter earnings per share of 55 cents. That represents a decline from 72 cents in Q3 2024.
A beat looks likely though. Tesla delivered 497,099 vehicles in the third quarter, smashing estimates of 445,000 units.
The delivery number set a new company record. It topped the previous high of 495,570 vehicles from Q4 2024.
Analyst EPS estimates have risen about five cents since the delivery report. The strong sales also reduced inventory levels heading into Q4.
Analyst Coverage and Price Targets
Melius Research initiated coverage Monday with a buy rating and $520 price target. Analyst Rob Wertheimer called Tesla shares a “must own” investment.
He cited the company’s AI potential and manufacturing scale. “The disruptive force of AI will wreck multitrillion dollar industries, starting with auto,” Wertheimer wrote.
Wertheimer acknowledged Tesla’s $1 trillion valuation is difficult to justify. He described the valuation as mostly “guesswork.”
Evercore ISI raised its price target to $300 from $235. The firm maintained an in-line rating.
Currently, 47% of analysts rate Tesla stock as a buy. The S&P 500 average is 55%.
The average analyst price target stands at $367. That’s below current trading levels.
New Models and Tax Credit Impact
The $7,500 federal EV tax credit recently expired. This could pressure fourth-quarter sales across the industry.
Deutsche Bank analyst Edison Yu believes the impact might be less severe than feared. Tesla’s new Standard trims for Model 3 and Model Y could help offset weakness.
These variants cost about $5,000 less than Premium versions. They give buyers more affordable entry points.
Wall Street projects roughly 450,000 deliveries for Q4. Investors will focus on management’s guidance during the earnings call.
Attention will center on CEO Elon Musk’s robotaxi scaling plans. Tesla recently released Full Self-Driving V14 to influencers and select users.
Yu expressed hope for an all-new vehicle form factor. Analysts sometimes call this the Model Q or Model 2.
Reports suggest this lower-cost vehicle could launch in some markets in 2026. Tesla reportedly scrapped the project in 2024 to focus on robotaxis but may be reviving it.
China Market Performance
Tesla’s China performance shows mixed results. September sales hit 71,525 units in the domestic market, up year-over-year.
The new six-seat Model Y L helped drive gains. This ended two consecutive months of declines.
Tesla’s China market share reached 8.66% in September. That’s up from 8.33% in August.
However, year-to-date sales are down. Tesla sold 432,704 vehicles in China from January through September, down 6% from 2024.
Reports indicate Tesla is developing lower-cost Model Y and Model 3 versions for China. Launch timing could be sometime in 2026.
