Tesla Inc (TSLA)

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Tesla speeds toward unpleasant earnings turn
By: MarketWatch | October 20, 2019

Earnings Watch: Nearly a quarter of the S&P 500 scheduled to report results in the week ahead

Prepare for an earnings onslaught in the week ahead, headlined by Tesla Inc., Boeing Co. and a flurry of big tech names.

A quarter of the S&P 500 index SPX, -0.39% is set to report results in the coming week, along with a dozen Dow Jones Industrial Average DJIA, -0.95% components, more than a third of the index.

Following this rush of numbers, investors will have a better sense of whether the S&P 500 will likely remain in an earnings recession, which occurs if the index sees average earnings fall for at least two straight quarters.

Tesla TSLA, -1.92% looks likely to see year-over-year revenue decline in its first quarter and its third consecutive unprofitable quarter, despite selling a record number of cars. Investors will be looking for positive free cash flow, a forecast for profit or any signs that Tesla is on a path to profitability, or at least that demand is still strong for Tesla’s cars.

After Tesla announced its third-quarter delivery total, formerly bullish JMP Group analysts downgraded the stock to “hold” and said it was “the first time since covering the stock that we found ourselves wondering whether demand growth for (Tesla’s) cars might be leveling off.”

Chief Executive Elon Musk will attempt to counter that notion while attempting to get production started in China and prepping for the launch of the Model Y. An RBC analyst believes Tesla might move up that mid-SUV — which is expected to start production late next year — to help jolt growth.

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