Tesla's Profitable Quarter and Earnings Beat: What Wall Street Is Saying

Many of Tesla's Wall Street analysts see downside from the stock's $1,600 share price.
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Tesla  (TSLA) - Get Report swung to a second quarter profit of $104 million and beat analysts' earnings and revenue expectations. The quarterly profit was the fourth consecutive quarterly profit the company has posted, making Tesla eligible for inclusion on the S&P 500. 

However, analyst firms had a mostly muted response to the company's earnings due to its sky-high $300 billion valuation. 

Tesla shares were up slightly to $1,598.24 in morning trading on Thursday after rising sharply on Wednesday after-hours after the report was first released. 

Here's what Wall Street is saying about Tesla: 

Deutsche Bank (Hold rating maintained, PT raised from $500 to $1,500)

"Tesla stock has seemingly been making new all-time highs every week, supported by leaks of the strong 2Q performance and expected inclusion into the S&P 500. We believe the upcoming positive potential catalysts for Tesla (addition to the S&P 500), combined  with the scarcity of investment opportunities in the vehicle electrification space, could keep momentum strong in the near-term."

- Emmanuel Rosner

JPMorgan (Underweight rating maintained, PT raised from $295 to $325)

"Its products are bold, distinctive, elegant, and highly entertaining to drive. The company is led by visionary leadership, backed by a management team with solid functional strength. Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition.

- Ryan Brinkman

Morgan Stanley (Underweight Rating maintained, $740 PT unchanged)

"In our opinion, bears really would have to nit pick at the release to construct a materially negative narrative here... We remain Underweight. Our long-term concerns around sustainability of profit in China, poor auto industry fundamentals, and what we believe to be inevitable competition in EVs and AVs from a host of well capitalized tech firms (AMZN, AAPL, GOOGL, etc.) and OEMs are just not seen by the market as a big enough part of the narrative and the risks are under-appreciated by the market."

-Adam Jonas

Barclays (Underweight rating maintained, $300 PT unchanged)

"Why Underweight? In spite of an impressive set of products and early leadership in the field of vehicle electrification, we see Tesla shares as overvalued. We believe the stock is not accounting for the risks and challenges inherent in Tesla's lofty growth ambitions."

- Brian Johnson

Cowen (rating upgraded to Market Perform from Underperform, PT raised to $1,100 from $300)

"We fully admit we have been wrong on TSLA the last few years. Execution on margins, cost control, lower capex and a faster ramp of factories and new vehicles have been above our expectations. TSLA shares tend to "work" when many new things are coming, and we see new factories, vehicle platforms and in-house batteries driving sentiment. The Sept. 22 Battery Day likely serves as the next catalyst.

-Jeffrey Osborne