Tesla’s latest earnings report for the third quarter revealed a mixed performance that has left many analysts concerned about the company’s future trajectory. The electric vehicle manufacturer reported adjusted earnings of 50 cents per share, falling short of the anticipated 54 cents according to analysts surveyed by LSEG. Despite this earnings miss, Tesla’s revenue surged to $28.10 billion, surpassing estimates of $26.37 billion. The automotive segment saw a year-over-year revenue increase of 6%, with figures climbing to $21.2 billion from $20 billion. This uptick in sales can be attributed to customers accelerating their purchases ahead of the expiration of federal tax credits for electric vehicles.
Analysts are now closely observing the impact of these tax credit expirations on future demand, as well as the pressures from rising tariff costs. Additionally, there is keen interest in Tesla’s efforts to scale its Robotaxi business. Notably, Morgan Stanley’s analyst Adam Jonas, regarded as one of Tesla’s staunchest supporters, remarked that the company is “navigating a dignified exit from the steering-wheel-having auto business while maintaining a resilient free cash flow (FCF) profile.”
Various financial institutions have shared their perspectives on Tesla’s performance:
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Wells Fargo has assigned an underweight rating with a price target of $120, implying a potential decline of approximately 73% from recent closing prices. Analyst Colin Langan suggests that while Tesla has made lofty promises for 2026, including advancements in robotics and fully autonomous vehicles, the core automotive business appears to be deteriorating.
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UBS has issued a sell rating with a target of $247, forecasting a roughly 44% drop. The bank emphasized the lack of a clear near-term outlook, suggesting that Tesla is transitioning from an electric vehicle manufacturer to an AI-focused company. UBS anticipates updates on future opportunities following the upcoming shareholder meeting but holds that the current market valuation is heavily weighted toward these ventures.
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Jefferies maintains a hold rating with a $300 target, indicating a downside of about 32%. The firm noted a slight miss in earnings before interest and taxes but highlighted a substantial beat on free cash flow. Jefferies believes Tesla’s current automotive business does not drive overall valuation but continues to generate cash flow sufficient for ongoing development.
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Barclays holds an equal weight rating with a target of $350, suggesting a potential downside of 20%. The firm posits that the automotive segment’s poor earnings result is irrelevant, as the future emphasis for Tesla is shifting toward AI growth initiatives.
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Goldman Sachs has adopted a neutral stance with a target of $400, which is 9% lower than the previous closing price. The firm expects Tesla’s earnings per share to grow in tandem with contributions from autonomy and robotics but remains more conservative in its profit expectations compared to the company’s targets.
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Morgan Stanley maintains an overweight rating with a price target of $410, reiterating its belief in Tesla’s FCF resilience while emphasizing the importance of the company’s strides in autonomy amid increasing competition.
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Deutsche Bank has set a buy rating with a target of $440, a slight increase from its previous target. The analysis asserts that while both the Robotaxi and humanoid programs are progressing slower than expected, advancements in full self-driving technology could signify a pivotal moment for Tesla.
As Tesla navigates the complexities of an evolving market and focuses on future technologies, investor sentiment remains mixed, reflecting apprehension and optimism around its long-term viability in an increasingly competitive landscape.
