TSLA Stock Heads For Worst Day In Nearly 7 Weeks – Goldman Sachs Flags Two Key Factors Likely To Pressure Tesla’s Profitability

Goldman Sachs expects Tesla’s profitability and free cash flow could remain under pressure in the near to medium term due to higher operating expenses and capital expenditures.

• Goldman Sachs reiterated its ‘Neutral’ rating and a $360 price target, according to Investing.com
• UBS increased its earnings forecasts for FY2027 and 2028, driven by FSD and energy storage demand
• Tesla reported quarterly revenue of $28 billion, compared with analysts’ expectations of $28.3 billion, according to Fiscal.ai.

Tesla’s third-quarter results drew a mixed reaction from Wall Street, with Goldman Sachs saying the EV maker’s profitability and free cash flow could remain under pressure in the near to medium term because of higher operating expenses and capital expenditures.

The brokerage also added that growing competition across electric vehicles, autonomous driving, energy, and robotics could slow earnings growth.

Goldman Sachs reiterated its ‘Neutral’ rating and a $360 price target, according to Investing.com. This represents a 1.6% downside from current levels. While it acknowledged Tesla’s progress across multiple businesses, the stock’s current valuation leaves little room for upside.

TSLA shares were down 5% at the time of writing. If the levels hold after the opening bell, the stock would clock its biggest single-day loss in nearly seven weeks.

Tesla Lowers FY 2026 Capex Guidance

Tesla reported quarterly revenue of $28 billion, compared with analysts’ expectations of $28.3 billion, according to Fiscal.ai. Adjusted earnings of $0.48 per share beat estimates of $0.45 per share.

Adjusted net income fell 4% to $1.7 billion, while capital expenditures more than doubled to $4.7 billion. Free cash flow stood at $1.5 billion. Tesla also lowered its full year (FY) 2026 capital expenditure outlook to $20 billion from its previous guidance of more than $25 billion.

Wall Street Backs Tesla’s FSD And Energy Storage Businesses

TD Cowen maintained its ‘Buy’ rating and $460 price target, citing improving automotive margins and progress in autonomous driving. The firm highlighted Tesla’s largest vehicle order backlog in four years and full self-driving (FSD) adoption of more than 75% in new deliveries in North America.

UBS raised its price target to $425 from $391 while maintaining a ‘Neutral’ rating. It raised its earnings forecasts for 2027 and 2028, driven by FSD and energy storage demand, but does not expect robotaxis to contribute meaningfully a the financials until late 2027 or 2028.

Meanwhile, Piper Sandler raised its price target to $475 from $450 and reiterated its ‘Overweight’ rating.

Retail Expects TSLA To Be Oversold

Retail sentiment on Stocktwits remained ‘bullish’ over the past 24 hours, amid ‘high’ message volumes.

One user expects the stock to be oversold over the next couple of sessions.

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Another user said neither “perfect quarter” nor “total disaster” does justice to the Q3 print.

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TSLA shares are down about 12% so far this year, the worst-performing Mag 7 stock.

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