---
title: "1 Wall Street Analyst Thinks Tesla Stock Is Going to $258. Is It a Buy After a Post-Earnings Pullback?"
description: "Tesla's second-quarter earnings report disappointed investors and analysts, leading to a drop in stock price. Citigroup analyst Itay Michaeli lowered the price target to $258 per share, citing decreas"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/209983940.md"
published_at: "2024-07-27T02:00:34.000Z"
---

# 1 Wall Street Analyst Thinks Tesla Stock Is Going to $258. Is It a Buy After a Post-Earnings Pullback?

> Tesla's second-quarter earnings report disappointed investors and analysts, leading to a drop in stock price. Citigroup analyst Itay Michaeli lowered the price target to $258 per share, citing decreased profit margins. However, potential upcoming catalysts, such as a new low-priced model and self-driving robotaxis, could still add value. The report highlighted that Tesla's stock valuation may not be justified by its sales and profits. Investors who don't believe in the company's self-driving vehicle plan should consider other investment options.

**Tesla**'s (TSLA -0.20%) highly anticipated second-quarter earnings report landed with a thud for investors and some analysts. After the leading electric vehicle (EV) manufacturer announced a surprisingly high 444,000 vehicles were delivered in the three-month period, investors thought the subsequent earnings announcement would also surprise to the upside.

However, profit margins continued to drop due to increased competition and price cuts. That led **Citigroup** analyst Itay Michaeli to lower his firm's price target on the stock from $274 to $258 per share. However, that still implies a nearly 20% gain after Tesla shares sank in response to the quarterly report.

That pullback came after investors anticipating a more positive report had driven shares sharply higher over the past month. The post-earnings reaction, however, pushed Tesla stock into negative territory for the year.

## Tesla's still generating cash

Tesla's report was really a mixed bag. While its automotive profit margin continued to trend lower, the company still generated $1.3 billion in free cash flow after capital expenditures. But automotive profit margin, excluding regulatory credit revenue, dropped to 14.6%. That's down from 18.2% in the prior-year period and 25.1% two years ago.

That's the major reason Michaeli was unimpressed with the results. However, like many Tesla investors, his focus remains on potential upcoming catalysts including a new, low-priced model as well as self-driving robotaxis.

As Tesla CEO Elon Musk himself said, investors who don't believe the company can execute its full self-driving vehicle plan shouldn't own the stock. The second-quarter report reinforced that sentiment. The company's auto sales and profits don't justify Tesla's stock valuation. Potential catalysts that can add value include the lower-priced EV model, the energy business that had a record quarter, and a full self-driving fleet. Those who don't see those catalysts panning out should look to invest elsewhere.

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.