Morningstar keeps $450 fair value on Tesla, calls post-earnings slide a buying opportunity
Morningstar held its $450 fair value estimate on Tesla — about 46% above current levels — even after the post-Q2-earnings selloff, calling it a buying opportunity despite operating income falling 57% and free cash flow turning negative.
Tesla's Q2 results missed on profitability. Adjusted EPS came in below estimates, operating income fell 57% year over year, and operating margin narrowed to 1.4%.
Capital expenditure rose to $5.79 billion, pushing free cash flow to a $1.09 billion deficit — the result of ramped-up spending on AI, Robotaxi, Optimus, and manufacturing capacity.
Even so, Morningstar held its existing $450 fair value estimate through the post-earnings drop — implying roughly 46% upside from current levels — and framed the selloff as a buying opportunity.
Tesla itself guided for 2026 capex above $25 billion, and Deepwater's Gene Munster expects another $25 billion in 2027, above Wall Street's roughly $21 billion consensus.
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