Earnings Preview: Tesla in focus

21 October, 2020

One of the most striking things about Tesla Inc. shares is the fact that they have appreciated over 400% since the start of the year! Such mouth-watering gains have made it the best performer on the Nasdaq in 2020 and golden child of the automaker industry.

This is incredible stuff, especially when considering how the coronavirus pandemic has severely punished the majority of stocks across the globe. Although the phenomenal rally witnessed over the past few months make Tesla one of the star performers in 2020, the upside has lost momentum recently with shares on their longest losing streak since mid-March. Stocks tumbles as much as 2.4% on Tuesday, bringing losses to losses to as much as 8.3% over the past four days - the biggest fall over such a period since September 25.

All eyes will be on Tesla’s latest earnings report which is scheduled to be released after US markets close on Wednesday. Wall Street is expecting earnings of $0.56 a share, up from the $0.37 seen in the same period last year. Revenue is pegged at $8.26bn, a hefty 31% increase on last year's $6.3bn. If the company is able to dish out an upside surprise, this could inject Tesla bulls with enough inspiration to elevate prices back to all-time highs.

Digger deeper, Tesla already offered an appetizer over what to expect for its earning after revealing that it produced 139,000 cars during the third quarter of 2020. This was over 50% more than Q2 thanks to a jump in demand for the Model 3 and new Model Y. While such a performance would be a welcome development for stocks, investors are more concerned whether Tesla will be able to deliver 500,000 vehicles this year.

The million dollar question is whether Tesla can deliver 500,000 cars in 2020. 318,777 cars have already been created during the first three quarters of 2020. This means that Tesla needs to sell at least 181,223 cars during the final quarter of 2020 to achieve this ambitious target. Whatever the outcome of the pending earnings report, it will certainly have an impact on Tesla stocks.

Talking technicals, prices have been under pressure on the past few weeks after investors reversed from Tesla stocks following Elon’s Musk’s flat Battery Day. A sense of anticipation is mounting ahead of the earnings report. Will Tesla bulls be instilled with enough inspiration to send prices back towards $500 or will a disappointing report bring bears back into the picture? Time will tell.

Stock investors remain bullish despite negative headlines3 Dec, 2020  

The S&P 500 registered a new record high on Wednesday, rising 0.2% as the rotation to economically sensitive stocks continued into the first week of December.

OPEC+ to re-attempt breaking deadlock today3 Dec, 2020  

Oil prices are keeping the faith that OPEC+ will come good on staving its supplies from global markets, even as the alliance tries to keep it together amid an internal squabble...

Awaiting new drivers3 Dec, 2020  

US stock markets have opened up lower on the day as investors struggle to find fresh catalysts to extend their buying of stocks. The latest ADP private payrolls report just...

Asian stocks taking a break amid broader rally2 Dec, 2020  

Asian equities are edging lower on Wednesday, unable to keep pace with the new record highs posted by the S&P 500 and the Nasdaq 100 indices overnight.

Taking stock: Equity bulls wishing for mo' of November1 Dec, 2020  

US stocks fell on Monday, with the dip capping the end of an otherwise spectacular November for equities. The S&P 500 posted a 10.75 percent advance in November...

Cooling Commodity: Brent Oil wary of OPEC+ shock30 Nov, 2020  

Oil prices are starting the new week by trimming more of their November gains, amid reports that OPEC+ members are struggling to agree whether or not to delay...

Risk sentiment on thinning ice27 Nov, 2020  

Asian stocks are mixed while US and European equity futures are slightly lower, as risk appetite attempts to overcome concerns over the efficacy of AstraZeneca...

Key levels beckon for Dollar index, Gold, Pound26 Nov, 2020  

Unlike the heady performances in global equity markets, the FX complex has put in a relatively stoic performance, refusing to get too carried away by...

Risk-On Train Gathers Momentum25 Nov, 2020  

Risk-on remains the name of the game as investors across the globe soak up all the good news! A raft of positive vaccine developments, better-than-expected...