Tesla reports earnings this week. The focus could shift ‘back to fundamentals.’
Earnings Watch: Boeing and Southwest report amid aviation-industry drama, while analysts hunt for signs of optimism at Mattel and Hasbro
When Tesla Inc. reports third-quarter earnings on Wednesday, the results, for Wall Street, could be about getting back to basics, after some investors soured on a robotics event this month that was heavily-hyped but seen by some as light on specifics.
The electric-vehicle maker’s stock is down around 11% so far this year. And while that event, held in a city-like setting at a movie studio in Burbank, Calif., offered a first look at Tesla’s
TSLA
As MarketWatch noted last week, Barclays analysts said that “the focus for Tesla at least for now shifts back to fundamentals.” The fundamentals being Tesla’s demand outlook and signs of firmer profits.
“However, given our expectation of a [third-quarter] beat and reminder of stabilized near-term estimates, we believe the [third-quarter] results could be a positive near-term catalyst,” the analysts said, adding that that margins “have troughed.”
But as concerns about demand linger, the Wall Street Journal reported last week that Musk selected a close confidant to head up Tesla’s businesses in North America and Europe. And even as the company plows ahead with self-driving, that technology is being scrutinized by regulators, following a handful of reports of crashes under road conditions like fog, sun glare and dust. In one of those incidents, the National Highway Traffic Safety Administration said, a vehicle “fatally struck a pedestrian,” while an injury was reported in another.
The event in Burbank, called “We, Robot,” also introduced a larger vehicle called the Robovan, and an updated Optimus humanoid robot that Musk said would function as “your own R2-D2 or C-3PO.” He said the robotaxi, which had no steering wheel or pedals, was expected to cost less than $30,000.
He also said he expected to start rolling out fully autonomous, unsupervised, fully self-driving vehicle technology in Texas and California next year with the Model 3 and Model Y. And he said the company expected be producing Cybercabs “before 2027.”
But a moment before that, he noted: “I tend to be a little optimistic with timeframes.”
Bernstein analyst Toni Sacconaghi called the event “underwhelming and stunningly absent on detail.” At William Blair, Jed Dorsheimer said the presentation contained “little that will stick it to the bears in the near term.” Morgan Stanley’s Adam Jonas also raised questions over how much of a threat, exactly, Tesla’s ambitions represented to Uber Technologies Inc.
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and Alphabet Inc.’s
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Waymo.
However, BofA analysts said that the event overall delivered. And they said it could be “a good time to raise low-cost capital.”
“[Tesla] is undertaking investments in robotaxis, robotics (notably Optimus) and artificial intelligence that could require significant capital,” they said. “Given that, and considering headwinds in its core electric vehicle (EV) business, we would not be surprised if [Tesla] raised capital, which it has historically been able to do at an extremely low cost compared to its peers.”
This week in earnings
For the week ahead, 112 S&P 500 companies, including seven in the Dow, will report results, according to FactSet.
Highlights for the week include results from United Parcel Service Inc.
UPS
, which will shed more light on shipping demand and, in turn, broader consumer demand. Elsewhere in the business of lugging things around the country, railroad giants Norfolk Southern Corp.
NSC
and Union Pacific Corp.
UNP
also report, after businesses adjusted shipments ahead of a brief East Coast port strike, and after rival CSX Corp.
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warned of the impact from hurricanes Milton and Helene along with slipping fuel prices and coal demand.
Meanwhile, in the beverage industry, earnings are due from Coca-Cola Co.
KO
and Keurig Dr Pepper Inc.
KDP
. Those results will arrive as consumers continue to worry about grocery prices and some analysts worry rival PepsiCo. Inc.
PEP
may have to correct course after hiking prices too aggressively amid dimmer demand.
Food prices overall have become a bigger political issue. And among other political issues, corporate diversity and inclusion initiatives could also come up this week when quarterly financials drop from retailer Tractor Supply Co.
TSCO
and Harley-Davidson Inc.
HOG
, after both companies backed away from those efforts following conservative pressure campaigns.
Deckers Outdoor Corp.
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, which makes popular Hoka sneakers and other footwear brands like Ugg and Teva, and Skechers USA Inc.
SKX
also report earnings this week, as they compete with Nike Inc.
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and other heavyweights amid weaker demand. Online home-goods retailer Beyond Inc.
BYON
— the company that has preserved the leftovers of Bed Bath & Beyond — also reports, after agreeing to invest in Container Store Group Inc.
TCS
Elsewhere, General Motors Co.
GM
reports. Also on tap, many more: 3M Co.
MMM
, Dow Inc.
DOW
, Verizon Communications Inc.
VZ
, AT&T Inc.
T
, T-Mobile US Inc.
TMUS
, Sherwin-Williams Co.
SHW
, Whirlpool Corp.
WHR
, Winnebago Industries Inc.
WGO
, International Business Machines Corp.
IBM
and Capital One Financial Corp.
COF
The calls to put on your calendar
Boeing Co., Southwest Airlines, aviation drama: How much worse can it get for Boeing?
BA
We’ll find out a little more when the jet maker reports quarterly results on Wednesday. While signs of progress with striking union workers emerged over the weekend, the company, still in the throes of a safety crisis, is laying off 10% of its staff and has warned of deeper losses. It is reportedly considering issuing new shares in an effort to bring in billions in cash. But its stock is down 40.4% so far this year. And Vertical Research, while noting Boeing’s position as one of only a few major aerospace companies and expressing confidence in its CEO, said the recent 10% staff cut “is just the start.”
Meanwhile, Southwest
LUV
reports results on Thursday. The airline has its own battles to fight, particularly with activist investor Elliott Management, which is trying to shake up the company’s board on grounds that the carrier’s leadership has been unable to keep up with the air-travel industry. American Airlines Group Inc.
AAL
also reports during the week.
The number to watch
Hasbro, Mattel sales and the holidays: Toy and game makers Mattel Inc.
MAT
and Hasbro Inc.
HAS
report results on Wednesday and Thursday, respectively, as analysts try to find bright spots from both ahead of the key holiday shopping season.
Toy demand has suffered as higher prices for groceries, insurance, housing and other services have converged on consumers. Signs of weaker demand emerged during this month’s big online discount days — where people increasingly concentrate their holiday purchases — thanks in part to hurricanes Milton and Helene. A major retail group expects holiday sales growth to slow.
Still, for Hasbro — which makes My Little Pony and Transformers toys along with games like Dungeons & Dragons and Magic: The Gathering — BofA analysts said they believed Magic: The Gathering’s recent Bloomburrow set had drawn new players with its more approachable format. And they said toy presentations at big retailers had “improved” heading into the holidays.
For Mattel, Stifel analysts said, the company is coming up against “peak contributions” from the “Barbie” movie last year. But they said there were still reasons to like the stock.
“It’s ‘the Barbie comp’ quarter that the market seems to have been
bracing for all year, though we think being able to move past this could be a positive,” they said.
“And we’re becoming increasingly more constructive on Mattel’s 2025-’26 entertainment line-up, the company’s investment grade balance sheet is in arguably the best shape it’s been in over the last decade, and valuations are reasonable, all of which may appeal to investors who are willing to look beyond the holiday window,” they continued.
Emily Bary and Claudia Assis contributed.
