Why Goldman Sachs Is Bullish On Tesla Ahead Of Q2 Earnings

Tesla, Inc. TSLA shares have been locked in a lackluster phase in 2021.

An upcoming catalyst that could meaningfully move the stock are the company's quarterly results, due July 26 after the close.

The Tesla Analyst: Goldman Sachs analyst Mark Delaney has a Buy rating and $860 price target for Tesla shares.

The Tesla Takeaways: Tesla is likely to report in-line second-quarter results, premised on strong quarterly deliveries, Delaney said in a note.

A combination of chip shortages, high freight costs and increasing input costs will offset strong sales numbers, the analyst said. 

The consensus expectations for Tesla's second-quarter call for earnings of 96 cents per share on revenues of $11.21 billion, up an estimated 85.5% year-over-year.

Goldman is positive on Tesla stock this earnings season, Delaney said.

Related Link: 8 Key Upcoming Catalysts That Could Drive Tesla Shares To $1,000

There is likely to be upside to second-half 2021 and 2022 consensus estimates, primarily due to strong Model Y SUV sales, the analyst said. The company released a new lower-cost version of the SUV in China and is ramping three new factories all focused on the Model Y, he said. 

"All else equal, we believe a higher mix of Model Y deliveries should be a tailwind to margins given its higher price points but similar cost structure to the Model 3," Delaney said. 

The analyst expects higher volumes and the company's leadership position in the rapidly growing EV market to lead to strong revenue and margin growth.

TSLA Price Action: Tesla shares were up 2.21% at $660.50 at the close Tuesday. 

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Photo: a lineup of Tesla vehicles. Courtesy photo.