Tesla (TSLA) Q2 2020 Forecasts Shows Division Among Analysts

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Tesla's (TSLA) Q2 2020 financial results will be shared after the market closes on Wednesday, July 22. If Tesla reports a Q2 profit, it would be eligible for S&P 500 inclusion, which many TSLA bulls have adamantly supported since Q4 2019. Q2 2020 would be the fourth consecutive time Tesla reported a profit. 

Long TSLA investors David Lee and Gali Russell already shared their forecasts for the second quarter. Lee predicted that Tesla would post a profit, while Russell was more conservative with his forecasts.

Earlier this week, Wall Street analysts shared their forecasts for Tesla's Q2 performance and there was some division. While some analysts have seen Tesla's potential, others still believe that its stock price could be too high. 

Tesla (TSLA) Q2 2020 Expectations For The Upcoming Earnings Call https://t.co/tx7RRjZtJh pic.twitter.com/OrROyC4Mpb

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Wedbush gave TSLA a NEUTRAL rating and set its price target to US$1,250, reported Business Insider. "While Street numbers are all over the map and looking for red ink this quarter, we are modeling profitability with the 90k delivery number and continued GM efficiency/cost-cutting getting Musk & Co. away from the red ink," wrote Wedbush analyst Daniel Ives in a note shared on Monday. 

JMP Securities gave Tesla a MARKET PERFORM rating and set its price target to US$1,500. JMP Securities analyst Joe Osha downgraded Tesla to market perform and warned that the stock's latest rally could bring challenges for investors. 

"We believe that any intermediate-term success that TSLA might discuss during its earnings call tomorrow is now fairly reflected in the stock price," wrote Osha in his note. "The stock has now gotten to our target level, however, and we think that investors face challenges in earning additional returns from here."

Then there is CFRA which gave TSLA a SELL rating and set its price target to US$1,100. "We think TSLA shares have gotten ahead of underlying fundamentals and do not appropriately reflect various risks surrounding the story, including the fact TSLA is entering a major spending cycle with the construction of Gigafactories 4 and 5, which we expect to act as a significant drag on free cash flow over the next several quarters," wrote Garret Nelson in his note last Friday.

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Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.