What to Expect From Tesla Earnings This Week

Tesla said with its most recent results that it expects to produce between 9,000 and 11,000 cars in the third quarter. Gross margin was expected to be consistent with the second quarter, and the forecast was to be marginally profitable in the third quarter on an operating basis.

For the fourth quarter, Thomson Reuters has consensus estimates of $0.75 in earnings per share and $1.39 billion in revenue.

In September, the figure was for Tesla to have delivered some 35,000 vehicles by the end of 2014. We will also be paying close attention to the so-called Gigafactory for updates as well.

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As the company approaches earnings it has faced more obstacles for its auto sales in the United States when Michigan joined four other states — New Jersey, Maryland, Texas and Arizona — that have banned Tesla from selling directly to consumers. Auto dealers in the five states succeeded in persuading legislators that the property and sales taxes the dealers pay combined with the number of workers they employ are far more important than letting customers chose to buy what they want. Governor Snyder said that direct sales of new cars is already banned in Michigan. The vote in the Michigan legislature was supported by both political parties and Governor Snyder, a Republican, is in a very tight reelection campaign.

Ascendiant Capital Markets initiated coverage of Tesla with a Buy rating and a $320 price target on October 30. Credit Suisse reiterated an Outperform rating with a price target of $324.93 on October 9.

Shares of Tesla tested the 50-day moving average from mid-September to mid-October, when they fell below. The 50-day moving average has acted as an overhang since the market sell-off at that time, and it reads at $252.70. The 200-day moving average was tested during the market sell-off but has acted as strong support. It reads at $225.91.

Shares of Tesla were trading up about 1% at $244.22 in the early afternoon Monday. The consensus analyst price target is $266.82, and the 52-week trading range is $116.10 to $291.42. The market cap is about $30 billion.

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