Wells Fargo reiterated an Equal Weight rating on Tesla (NASDAQ:TSLA) and raised their 12-month price target on the stock to $256.00 (From $170.00) ahead of the electric vehicle maker’s 2Q earnings release and webcast.
Tesla is scheduled to report 2Q results on Wednesday, July 19th. Wells Fargo anticipates that the automaker will report an EPS of $0.75, which is slightly below the consensus estimate of $0.79. Their analysis suggests that the average selling prices (ASPs) for Tesla vehicles will decrease to $46K, compared to $47K in Q1. This decline can be attributed to price reductions and a less favorable mix of vehicle trims in Q2. Furthermore, Wells Fargo predicts a quarter-on-quarter decrease of approximately 4.5% for the prices of Models Y and 3, which indicates a total decline of around 13% overall.
Analysts at the firm wrote in a note, “The stock has run up 68% in the last two months (vs S&P 9%) likely driven by stronger-than-expected Q2 deliveries, the various deals to share its charging network with competitors, reports Model 2 is launching by end of next year, and Model 3 SR qualifying for full EV tax credit.”
Wells Fargo cut their 2023 EPS estimates for the company from $3.40 to $3.25, 2024 estimates from $3.75 to $3.60, and 2025 from $3.85 to $3.75 to reflect Q2 price cuts. They raised 2026 estimates from $3.75 to $4.30 on Model 2 ramp and charging growth.
Shares of TSLA are up 1.92% in premarket trading on Monday.