Tesla 'one of the worst positioned' auto stocks for Q2 earnings season: analysts

Wells Fargo equity analysts said the Q2 earnings season looks like another challenging setup, with the majority of suppliers likely to miss consensus expectations while also facing risks of full-year guidance cuts.

Specifically, the investment bank said it is “least confident” in Tesla (NASDAQ:TSLA), Autoliv (NYSE:ALV), and TE Connectivity (NYSE:TEL), which appear to be among “the worst positioned” stocks ahead of Q2.

“We expect TSLA to be impacted by another sub 400K delivery quarter&lower pricing driven by financing promos,” analysts noted.

“ALV&TEL have been supplier refuges, yet are still at the mercy of production,&recent cuts don't seem to be reflected in consensus,” they added.

Analysts also expect a guidance cut from Aptiv (NYSE:APTV), driven by a worse second-half mix. Adjusted EBIT is expected to be partially offset by the strength of the peso, while the EPS guidance is likely to be salvaged by the early closure of Motional.

On the flip side, Wells Fargo sees BorgWarner (NYSE:BWA) and Visteon (NASDAQ:VC) as best positioned for a beat in Q2. Its analysts note that BWA has “the cleanest setup” into the quarter “due to better customer mix helped by their high domestic China exposure.”

Furthermore, BWA’s customers and platforms are less affected by recent S&P cuts, analysts added.