RBC Capital's Rating on Tesla#
RBC Capital has reiterated an Outperform rating for Tesla (NASDAQ:TSLA) following the company's first-quarter results for 2026. They have set a price target of $480.00, indicating confidence in Tesla's performance despite some challenges.
Strong Margins and Subscription Growth#
In the first quarter, Tesla's auto gross margin, which measures the profitability of its vehicle sales excluding credits, reached 19.2%. This figure exceeded analysts' expectations of 15.1% and is an improvement from the company's gross profit margin of 18% over the past year. Additionally, subscriptions for Tesla's Full Self-Driving feature grew by 51% year-over-year, reaching 1.28 million.
Vehicle Deliveries and Production#
Tesla reported delivering 358,023 vehicles in the first quarter of 2026, which was below the expected 365,645 but higher than the 336,381 delivered in the same period last year. The company produced 408,386 vehicles this quarter, a decrease from 446,063 in the first quarter of 2025. This decline in production raises concerns amid a competitive auto market.
Future Growth and Challenges#
Tesla is expanding its Full Self-Driving capabilities to new cities, including Dallas and Houston, bringing the total to four cities. However, RBC Capital noted that the energy storage segment showed weaker results due to the timing of deployments. They also mentioned that tariffs could impact this segment's growth. While some analysts, like GLJ Research, have issued a Sell rating on Tesla, others, including Cantor Fitzgerald and BofA Securities, maintain a positive outlook with higher price targets. This mixed sentiment reflects the ongoing volatility in the auto sector, influenced by rising input costs and supply chain issues.