Freedom Broker analysts reiterate their “Hold” rating on shares of Tesla, Inc. (TSLA), but cut the 12-month target price from $420 to $360. At the current price of $313, this implies upside of about 15%. According to analyst Dmitry Pozdnyakov, strong growth in EV deliveries in Q2 failed to offset the deterioration in business profitability, and a period of high capex limits the potential for a re-rating over the coming quarters.
Tesla — revenue rose, but profit came in weaker than expected
Tesla is a U.S. manufacturer of electric vehicles, energy storage systems, and autonomous-driving solutions. The company is also developing projects in artificial intelligence and robotics, including self-driving cars and Optimus humanoid robots.
In Q2 2026, Tesla’s revenue increased 25.5% year over year to $28.2 billion versus $22.5 billion a year earlier. The figure was above the FactSet consensus forecast of $27.3 billion.
The core automotive segment increased revenue 23.1% to $20.5 billion. Energy business revenue rose 12.5% to $3.1 billion, while services and other operations posted the fastest growth — 50.4% to $4.6 billion.
At the same time, higher sales did not translate into a better financial result. Net income fell 5% year over year to $1.1 billion. Adjusted profit totaled $1.15 billion, and adjusted earnings per share were $0.33 versus the $0.55 consensus estimate.
The main problem is a sharp decline in margins
According to Freedom Broker analysts, the key negative factor of the quarter was an unexpected deterioration in gross profitability. Tesla’s gross margin declined to 16.8% versus an average of 19.1% over the previous four quarters.
Operating margin fell to 1.4% from 4.2% in the prior quarter and 4.1% a year earlier. Operating expenses rose 47% year over year amid investments in the development of Optimus, Cybercab, and other technology projects.
Analysts attribute pressure on gross margin to several factors at once: a 66.7% year-over-year decline in revenue from regulatory credit sales, higher raw material costs, and lower average vehicle selling prices. Tesla achieved strong growth in EV deliveries last quarter but was unable to convert that growth into net profit, Freedom Broker analysts believe.
Deliveries rose 25%, but the company is losing ground in the U.S.
In Q2, Tesla delivered 480.1k EVs — 25% more than a year earlier and 34.1% more than the previous quarter. The main growth driver was China-made vehicles. According to analysts’ estimates, Tesla deliveries in China increased 32.8% year over year, supported by demand for refreshed versions of the Model Y.
At the same time, the U.S. market remains weak. According to Kelley Blue Book, sales of new EVs in the U.S. fell by about 20.5% year over year in Q2, and Tesla’s deliveries may have declined by roughly 13.1%. The company’s U.S. market share fell to 50.5% from 54% the previous quarter.
Thus, strong growth in deliveries in China and Europe helped offset weakness in the U.S. market, but analysts expect overall demand could slow in the coming quarters.
Capex is becoming a new constraint
Tesla plans to allocate more than $25 billion to capital expenditures in 2026 versus $8.5 billion a year earlier. In 2027, investments could rise even more.
The funds will be used to develop robotaxis, manufacturing capacity for Optimus, semiconductor production, and the energy business. As early as Q2, capex more than doubled compared with the previous quarter, resulting in negative free cash flow of $1.1 billion.
According to Freedom Broker, the high investment burden could persist over the next two to three years. This creates additional pressure on Tesla’s financials at a time when its automotive business is facing intensifying competition and the need to cut prices.
Analysts cut the target price to $360
Freedom Broker analysts expect Tesla’s 2026 revenue to reach $105.9 billion, implying 11.6% year-over-year growth. In 2027, the figure could increase to $117.8 billion.
At the same time, the 2026 delivery forecast is 1.73 million vehicles, 5.9% higher than the prior year’s result. The EPS forecast was revised downward: to $1.17 in 2026 and $1.45 in 2027.
Against this backdrop, analysts maintain their “Hold” recommendation but lower Tesla’s target price from $420 to $360. At the current price of $313, upside is about 15%. The target price is based on a five-year discounted cash flow model using the FCFF method.
Pressure on deliveries intensified at the beginning of the year
Weakness in Tesla’s automotive business became visible back in Q1 2026. The company delivered 358k EVs — 6.3% more than a year earlier, but significantly below the consensus forecast of 380k vehicles and Freedom Broker analysts’ expectation of 399k units. Deliveries also fell 14.4% versus the previous quarter.
Against this backdrop, analysts cut Tesla’s 2026 delivery forecast from 1.76 million to 1.69 million vehicles. The main source of growth remained the Chinese market, while sales dynamics in the U.S. and Europe were less stable. Additional pressure on the business was created by intense competition, while the Model 3 and Model Y continued to account for the overwhelming majority of the company’s deliveries.
In April, Freedom Broker analysts lowered Tesla’s target price from $440 to $400 and maintained a “Hold” rating. After the release of the Q2 report, the target price was revised again — to $360.
This is not an individual investment recommendation.