JPMorgan says fade the Tesla pop, earnings boost 'unsustainable'

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Earnings News

Electric Vehicles,Investment Strategy,Stock Markets

The firm said some of the drivers of the per-share earnings beat may not stick around.

Investors should be wary of Tesla 's post-earnings rally, JPMorgan said. The electric vehicle maker reported adjusted earnings per share of 72 cents, topping the expectation of 58 cents from analysts polled by LSEG. However, the firm's $25.18 billion in revenue missed the consensus forecast of $25.37 billion. Still, the earnings beat appeared to be enough to send shares nearly 16% higher Thursday, making it the best performer in the Nasdaq 100 as the trading day kicked off.

While Brinkman said investors are likely excited about what he described as a "rare" earnings beat from Tesla, the analyst said the catalysts for it do not seem like long-term tailwinds. "We ... see several potentially unsustainable drivers of 3Q's better earnings and cash flow performance," he said, pointing specifically to the high sales of 100% margin regulatory credits and unusually large working capital benefits.

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