Analysts Are Divided Over Tesla Ahead of Q1 Earnings, but TSLA Stock Is a Buy Anyway
Tesla (TSLA) will release its Q1 2026 earnings on April 22 after the close of markets. The stock has gained traction over the last couple of days and is approaching the $400 price level. Analysts are divided on TSLA stock heading into the Q1 confessional, given the divergent fortunes of the automotive and artificial intelligence…
Tesla (TSLA) will release its Q1 2026 earnings on April 22 after the close of markets. The stock has gained traction over the last couple of days and is approaching the $400 price level. Analysts are divided on TSLA stock heading into the Q1 confessional, given the divergent fortunes of the automotive and artificial intelligence (AI) businesses. Let’s explore whether TSLA stock is a buy ahead of the report.
To begin with, let’s look at Tesla’s Q1 2026 earnings estimates. Consensus estimates call for Tesla’s Q1 revenues to rise 15.5% year-over-year (YoY) to $22.4 billion. The company’s deliveries rose 6.3% YoY in Q1, while energy deployments fell from 10.4 GWh to 8.8 GWh. Analysts are modelling Tesla’s earnings per share (EPS) to rise 40% YoY to $0.21. I believe the estimates, particularly the topline figures, might be a bit aggressive.
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The analyst community’s opinion of Tesla has always been divided, and, if anything, the divide is only widening as the company pivots towards AI and its automotive business struggles to grow. Heading into the Q1 report, UBS upgraded the stock from a “Sell” to “Neutral” while maintaining its target price of $352. While analyst Joseph Spak termed Tesla a “leader in physical AI,” he is not convinced that the company will meet delivery and robotaxi rollout targets.
TD Cowen analyst Itay Michaeli maintained his “Buy” rating on TSLA while lowering the target price from $519 to $490. Michaeli, however, sees a positive setup for the stock heading into the confessional. RBC analyst Tom Narayanan also lowered Tesla’s target price from $500 to $480, citing the challenges in the EV market and rising competition in China.
Barclays maintained its “Equal Weight” rating and $360 target price even as the brokerage expects Tesla to raise its 2026 capex guidance, which was originally set at $20 billion. Notably, as Tesla embarks on an AI future, its capex needs are bound to increase, especially as it pursues its Terafab semiconductor fabrication initiative, for which it has also roped in Intel (INTC) as a partner.
Overall, TSLA stock has a consensus rating of “Hold” from the 43 analysts polled by Barchart, while its mean target price of $401.39 is only about 2% higher than the current price levels.
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In my previous article, I had noted that it makes sense to buy the dip in TSLA stock. The stock has rebounded from those levels, even though some of it could be attributable to the broader market rally. The bulk of the rise, however, came yesterday after Musk said that Tesla has taped its AI5 chip. It is a key milestone for the company, even though the chip is running way behind schedule.
Going forward, AI-related announcements could be a key driver of Tesla’s price action. The company is a play on the physical AI story as it expands its robotaxi fleet and prepares to commercialize its Optimus humanoid.
As for the EV business, as legacy automakers pull back from vehicle electrification, Tesla should be able to increase its U.S. market share. The pricing environment should also stabilize as competition comes down. Moreover, while the withdrawal of the EV tax credit has dampened sales, the recent rise in crude oil prices might help spur EV adoption.
The launch of new vehicles like the Cybercab should lead to higher volumes for Tesla, even though it might struggle to grow its deliveries this year as well. The company’s EV deliveries have fallen on a YoY basis for two consecutive years now, and while deliveries rose on an annual basis in Q1, the rise came from a favorable base. Notably, Tesla formally withdrew the forecast of 20 million annual deliveries by 2030 and has virtually given up on the 50% annual delivery growth guidance.
Overall, I remain constructive on TSLA stock heading into the Q1 earnings and expect bullish AI commentary from Musk even though I fully second UBS analyst Joseph Spak’s views that “Tesla stock trades more on sentiment, narrative and momentum than fundamentals.”
On the date of publication, Mohit Oberoi had a position in: TSLA, INTC. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
