Tesla (TSLA) Stock: Record Deliveries Set Stage for Q3 Earnings Surprise

TLDR

• Tesla stock rose 1.4% to $435.15 on Wednesday as investors await third-quarter earnings scheduled for October 22
• Analysts expect third-quarter earnings per share of 55 cents, down from 72 cents in the same quarter last year
• Tesla delivered 497,099 vehicles in Q3, beating Wall Street expectations of 445,000 units and setting a new record
• The company launched cheaper “Standard” versions of Model 3 and Model Y, priced about $5,000 less than Premium trims
• Melius Research initiated coverage with a buy rating and $520 price target, calling Tesla a “must own” stock

Tesla stock climbed 1.4% to $435.15 on Wednesday as investors positioned themselves ahead of the company’s third-quarter earnings report. The report is due after market close on October 22.

The stock has performed well lately. Over the past three months, shares jumped 38%.

Year to date, Tesla is up 6%. Over the past 12 months, the stock has gained 95%.

Analysts expect earnings per share of 55 cents for the third quarter. That’s down from 72 cents in the same quarter last year.

However, there’s a good chance Tesla will beat expectations. The company delivered 497,099 vehicles in Q3, crushing Wall Street’s forecast of 445,000 units.

This was a new record, topping the previous high of 495,570 vehicles set in Q4 2024. Since the delivery numbers came out, analyst EPS estimates have risen by about a nickel.

Investors will likely focus more on fourth-quarter guidance than past results. The $7,500 federal EV tax credit recently expired, which could pressure sales.

Deutsche Bank analyst Edison Yu believes the drop might not be as bad as feared. The new “Standard” versions of Model 3 and Model Y could help offset weakness.

These Standard trims start at about $5,000 less than Premium versions. They give consumers more options at lower price points.

New Coverage and Price Targets

Melius Research initiated coverage of Tesla on Monday with a buy rating. Analyst Rob Wertheimer set a $520 price target, representing about 20% upside.

However, Wertheimer admitted Tesla’s valuation is mostly “guesswork.” Justifying the company’s $1 trillion valuation remains challenging.

Evercore ISI raised its price target to $300 from $235 on Monday. The firm kept an in-line rating on shares.

Among all analysts covering Tesla, 47% rate shares as a buy. That’s below the S&P 500 average of 55%.

The average analyst price target sits at $367. That’s below the current stock price.

Fourth Quarter Outlook

Wall Street currently projects roughly 450,000 deliveries for the fourth quarter. Attention during the earnings call will focus on Musk’s projections for robotaxi scaling and autonomy.

Tesla recently unveiled its Full Self-Driving V14. However, the company only released it to influencers and a limited number of users.

In China, reports suggest Tesla is developing lower-cost versions of Model Y and Model 3. The company may launch these trims in 2026.

Tesla is also reportedly looking to restart its “low-cost” vehicle project. The company scrapped this project in 2024 to focus on robotaxi development.

Analysts sometimes refer to this vehicle as the Model Q or Model 2. Deutsche Bank’s Yu is hopeful it will launch in some geographies in 2026.

China sales present a mixed picture. Tesla sold 71,525 EVs in China’s domestic market in September, up from a year earlier.

This ended two months of declines. The new six-seat Model Y L contributed to the gain.

However, year-to-date sales in China are down. From January to September, Tesla sold 432,704 vehicles in China, down about 6% from the same period in 2024.

Tesla’s share of China’s battery electric vehicle market stood at 8.66% in September. That’s up slightly from 8.33% in August.

The Q3 delivery beat reduced EV inventories, which is positive for results. Sharp consensus, which tracks recent analyst revisions, predicts earnings of 55 cents per share and revenue of $27.08 billion.

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