A big Tesla skeptic on Wall Street raises his estimate for second-quarter earnings

Tesla Model 3 is being displayed for the press members ahead of 97th Brussels Motor Show at Brussels Expo Center in Brussels, Belgium on January 19, 2019.

Dursun Aydemir | Anadolu Agency | Getty Images

Tesla got a boost on Friday from one of its biggest Wall Street skeptics, who now sees Elon Musk’s electric car company headed to a nearly profitable second quarter earnings report.

Barclays, which has an underweight rating and a $150 price target on Tesla shares, raised its forecast for Tesla’s second quarter report to a loss of 16 cents a share — a jump from the firm’s previous estimate of a loss of 71 cents a share. Tesla is expected to report its quarterly earnings next Wednesday.

“Increasing 2Q estimates as TSLA did indeed ‘move the metal,'” Barclays analyst Brian Johnson said in a note to investors.

Tesla shares rose 0.7% in premarket trading from its previous close of $253.54.

The company’s stock surged in early July after Tesla reported a record second-quarter deliveries number. At the time, Johnson called the number “impressive” but said Tesla would have to show that it’s improving profitability, urging investors to focus on the second quarter earnings report. But the stock has climbed nearly 13% since the the deliveries update, a fact that Johnson highlighted in his latest note.

“While we were not overly surprised by the swing trade going into the delivery report, and the reaction thereafter, we are somewhat surprised by the continued strength” of Tesla shares, Johnson said.

Additionally, while Barclays reiterated that it is “fundamentally bearish” on Tesla, the analyst said the firm thinks Tesla has “likely raised enough cash to make it through 2020, even with below guided deliveries.” That marks a noted shift in Johnson’s view from earlier this month, when he said Tesla may need to raise more capital “as soon as next year” if it is going to “maintain an accelerating growth narrative.”

– CNBC’s Michael Bloom contributed to this report.

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