Tesla shares have been on a heater since the electric vehicle maker reported third-quarter vehicle deliveries that surprised many Wall Street watchers last week.
Tesla delivered 486,532 vehicles in the trailing three months while producing more than 464,000 vehicles. While deliveries fell about 2% year over year from 497,099 in 2025, Tesla moved far more vehicles than the 461,000 analysts polled by StreetAccount were expecting, representing a 5.5% beat.
The beat sent prices soaring by 5% on the Friday after its release and that rally continued into Monday, Oct. 5, with shares up another 2% to $378.14 at last check.
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That price is well ahead of the $370 price target analysts at Deutsche Bank set for the stock. So the bank raised its price target this week.
Deutsche Bank raises Tesla price target on delivery beat
Deutsche Bank analysts led by Edison Yu raised Tesla’s price target to $420 from $370.59, an 11% increase, after Tesla topped its own third-quarter delivery estimate of 465,000 by more than 5%, according to a note viewed by TheStreet.
The firm was particularly impressed with the company’s international performance.
“Our sense is upside came from Europe being stronger in September (e.g., France, Sweden) and China also outperforming, helped by cash discounts on in-stock cars; we think U.S. demand remained supply constrained with Model Y and Model Y L wait times running into 2027,” Yu said.
Deutsche Bank also noted that Tesla’s 3% quarter-over-quarter increase in production represented a drawdown of more than 22,000 units of inventory, which “should be a tailwind for working capital.”
DB raises Tesla revenue expectations
The third quarter was always going to be a tough comp for Tesla due to the buying rush induced by the expiration of the federal $7,500 EV tax credit last September. Buyers rushed to purchase EVs ahead of the government-funded program’s end, leaving EV makers with inflated numbers.
But this year, DB sees Tesla’s auto gross margin excluding credits relatively flat quarter over quarter, “supported by better fixed cost absorption.”
However, while Deutsche Bank raised its third-quarter revenue expectations to $27.7 billion from its previous view of $27.2 billion, the firm has a 30-cent-per-share EPS expectation, well below Wall Street’s 41-cent-per-share expectation.
Still, some of its full year expectations are bullish.
“Having cleared out a lot of inventory, 4Q deliveries should track production more closely and may be more supply-constrained, but Giga Texas is ramping Model Y L output, which should support our 485k 4Q estimate. For the full year, this implies vehicle deliveries of about 1.8m or +11% YoY,” Yu said.
But DB lowered its full-year EPS expectations to $1.40 per share from $1.48 per share while increasing its revenue expectations to $106.1 billion from $105.4 billion. This would represent a $12 billion year-over-year increase and represent an all-time record for Tesla.
Tesla looks to turn around recent trends
Tesla needs to finish the year strong to avoid falling sales for a third consecutive year.
In 2025, Tesla’s revenue fell year over year for the first time in its history as sales and margins fell. But unlike its revenue decline, the margin problem has continued into 2026.
Tesla reported second-quarter revenue of $28.2 billion, a record that topped analyst estimates of $27.6 billion. However, the 33 cents per share the company reported missed estimates from analysts polled by Tesla (TSLA), who were expecting 55 cents per share.
So it seems that as Tesla chased volume, delivering 480,126 vehicles, a 25% increase from the same period a year ago, it sacrificed margins to get there. Net income for the quarter fell 17% to $1.15 billion. Analysts were expecting net income of $1.27 billion.
Meanwhile, Tesla’s results from the first quarter were flipped.
Tesla missed analyst revenue expectations, reporting $22.39 billion versus analysts’ $22.64 billion, but earnings of 41 cents per share topped estimates of 37 cents per share.
Despite its recent rally, Tesla shares are down more than 13% year to date and more than 16% year over year.
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