All Eyes on Tesla as it Reports Q1 Earnings Tomorrow

The electric vehicle (EV) sector has been supported by rising petroleum prices and increased consumer awareness around environmental issues. Tesla has been one of the more resilient stocks on the market, despite the recent tech-focused sell-off and has risen over 57% in the last year and 16% over the last six months.

The EV stalwart will release its first-quarter earnings report for 2022 after the market closes tomorrow, April 20.

Let’s take a look at how Tesla is expected to perform in the first quarter.

A Few Points Worth Noting

Despite supply chain bottlenecks and COVID-related production shutdowns, Tesla has already set the pace by posting record first-quarter deliveries. The EV leader delivered 310,048 units, a 68% rise year-over-year.

However, first-quarter production fell marginally to 305,407 units from the 305,800 units reported in the fourth quarter. This suggests that like many other automakers, Tesla has been affected by supply chain restrictions and higher input costs, at least to some extent. Furthermore, the Shanghai factory lockout is expected to have had some impact on production numbers.

Nevertheless, Tesla’s output at two new factories, one in Germany and the other in Texas, should help the business improve production and counter some of the negative effects of the Shanghai shutdown.

Healthy Q1 Expectations

According to experts, Tesla is expected to report adjusted earnings of $2.26 per share in the first quarter. This figure represents a spike of 143% from the year-ago quarter. In addition, experts forecast Q1 revenue to increase by 69% to $17.6 billion.

Recent Developments

The electric car maker is preparing to resume manufacturing in Shanghai, which has been shut down for three weeks due to a surge in COVID-19 cases in China. Tesla employees will reportedly be required to live on-site for at least a short period of time.

The reopening of the factory would increase output, allowing the company to satisfy the growing demand for its vehicles.

In other news, Tesla CEO Elon Musk recently attempted to buy Twitter (TWTR) for $54.20 per share, or $43 billion.

Investors expect Tesla to shed some light on the proposed acquisition together with its first-quarter earnings.

Wall Street’s Take

Ahead of the Q1 results, Piper Sandler analyst Alexander Potter maintained his Buy rating on the company but decreased the price target to $1,260 from $1,350.

According to the analyst, Tesla’s upcoming results may be impacted by forced lockdowns in China. As a result, Potter lowered his projections for 2022.

Wall Street analysts are cautiously optimistic about Tesla, with a Moderate Buy rating based on 15 Buys, five Holds, and six Sells. The average TSLA price target of $1006.04 implies that shares are fully valued at current levels.

Bottom Line

It will be fascinating to see how the company performs in the first quarter amid prolonged global supply chain concerns, inflationary pressures, and manufacturing shutdowns.

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