Tesla (NASDAQ:TSLA) shares saw their largest drop since 2020 on Wednesday, falling over 12%. The decline followed a negative reaction from investors to the EV leader’s Q2 earnings report.
Yet, despite the drama the negative print generated, Canaccord analyst George Gianarikas actually described the Q2 results as “mostly uneventful.”
“Yes, auto gross margins were weaker than expected — but were likely impacted by $622M in restructuring costs,” says the long-time TSLA bull. “We were also looking for meaningful metrics and color around FSD take rates after recent price cuts — but the most management would offer was that they say a ‘meaningful increase’. Overall, mostly expected news — including a mention of a return to EV penetration growth in 2Q24.”
Although the Q2 report didn’t provide many insights for Gianarikas, the analyst is building up an appetite for the “real, meaty catalysts” that are on the way.
One such catalyst is the rescheduled Robotaxi Day, now set for October 10. This event is expected to shed light on Tesla’s plans for its robotaxi vehicles and service offerings.
CEO Elon Musk struck a confident tone on the earnings call, saying that either late this year or next year, the company could achieve “unsupervised” FSD (full self-driving). That, says Gianarikas, is “way, way before our expectations,” although considering Musk’s record of missing timelines in the past, that should probably be taken with a grain of salt.
Regulatory concerns regarding FSD were also swatted aside by Musk, who suggested that if FSD was able to achieve MBTF (mean time between failure) better than a human, then, “what regulator could really stand in the way of that?”
“We take a more cautious stance on the regulatory climate,” says Gianarikas, “but are aware our perspective could prove unnecessarily wary.”
That’s not the only “meaty catalyst” to look out for. Another might be on the way in the shape of new affordable models, which could enter production in the first half of next year.
Bottom line, Gianarikas keeps a positive stance toward Tesla stock, with a Buy rating and a $254 price target, which implies a potential upside of ~18% from current levels. (To watch Gianarikas’ track record, click here)
That’s a bull’s take but most on the Street are less enthusiastic. TSLA only claims a Hold (i.e. Neutral) consensus rating, based on a mix of 12 Holds, 11 Buys and 7 Sells. The average target stands at $213.92, implying the shares will stay rangebound for the time being. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
