Investors should watch for Tesla’s post-earnings earnings surge, JPMorgan said. The electric vehicle maker reported adjusted earnings per share of 72 cents, beating analysts polled by LSEG of 58 cents. However, the company’s revenue of $25.18 billion missed the consensus forecast of $25.37 billion. Still, the earnings surge appeared to be enough to send the company’s shares up nearly 16% on Thursday, giving it the best performance on the Nasdaq 100 early in the trading day. However, analyst Ryan Brinkman has some doubts. While Brinkman said investors are likely excited about what he called Tesla’s “rare” earnings surge, the analyst said the catalysts for it don’t appear to be long-term drivers of earnings growth. “We see several potentially unsustainable factors driving improved earnings and cash flow in the third quarter,” he said, pointing in particular to strong regulatory loan sales at 100% margin and unusually strong working capital benefits. Brinkman, who has an underweight rating, expects painful changes in the stock price. Although the analyst raised his price target by $5 to $135, that still suggests the stock could drop nearly 37%. Certainly, Thursday’s increase represents a respite in a difficult period for stocks. The stock is down about 14% in 2024, shedding some gains after more than doubling in the previous year.
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