Tesla, Inc. (TSLA) is scheduled to report fourth-quarter results after the market close on Jan. 26. Here's what a bullish analyst is expecting from the earnings print. 

The Tesla Analyst: Jefferies analyst Philippe Houchois has a Buy rating and $1,400 price target for Tesla shares.

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The Tesla Takeaways

Tesla's fourth-quarter results are critical to validate the third-quarter dynamics that could see the company carving out meaningful share from legacy automakers and claim a disproportionate share of the industry profit pool, Houchois said in a note.

Annualizing fourth-quarter production suggests active capacity of 1.3 million units, the analyst said. Adding 50,000 units for the underused Model S/X vehicles and 600,000-unit capacity for Austin and Berlin, total capacity for the year end is close to 2 million units, he said.

Annualized production of 710,000 at Giga Shanghai shows the facility is breaking out of automotive production norms toward Elon Musk's ambition that each site should produce 1 million units. Reaching that number, Houchois said, is not a given due to general capacity constraints.

Citing acceleration in BEV demand and a growing backlog of vehicle orders, the analyst raised his 2022 sales forecast up by 12% to 1.51 million units. This is based on the assumption that the Austin and Berlin factories will start producing deliverable Model Ys in February and April, respectively.

Musk is likely to provide an updated product plan that should clarify widely rumored delays to the Cybertruck, Houchois said. More critical than the Cybertruck and/or Semi will be the roadmap to a smaller Tesla, the analyst said. If confirmed, the roadmap could underpin Tesla's drive to affordability, he added.

Jefferies also said it expects to hear about the progress on battery, especially about LFP and advancements in FSD.

The firm is modeling fourth-quarter and fiscal-year 2021 EBIT of $3.04 million and $6.95 million, respectively, based on auto gross margins of 29.6% and 27.2%, and including ZEV credits of $300 million. The firm estimates free cash flow of $1.9 billion and $4.1 billion, respectively.