Tesla stock (TSLA) extended its gains on Wednesday, rising more than 6% after surging 10% on Tuesday as Wall Street weighed on the electric car maker’s better-than-expected quarterly vehicle delivery results. Tesla stock is now up more than 70% from its recent low in late April.
Tesla said this week that it produced about 411,000 vehicles and delivered about 444,000 in the second quarter, which beat consensus estimates and was an increase from the first quarter.
And despite the year-over-year decline in vehicle deliveries, analysts were bullish on the report, pointing to signs that the EV industry may be holding up better than expected.
“There continues to be room for improvement in Tesla stock sentiment and broader EV sentiment compared to the negative sentiment seen over the past six months,” Citi analysts said after Tuesday’s results. “I see it as such,” he wrote.
Wedbush Securities’ Dan Ives said in a note that the company’s deliveries marked a “major turning point” in the “Tesla bull story.”
“The key for Tesla stock is that the Street recognizes Tesla as the most undervalued AI company on the market,” Ives wrote, with a price target of $275 to $300. “The mojo is back for Mr. Musk,” he added. A new bull market at $400 is set for 2025.
Ives added that the company’s robotaxi event on Aug. 8 “will pave the yellow brick road to a future of (fully autonomous) and self-driving cars.”
Morgan Stanley’s Adam Jonas called Tesla’s results “the first positive surprise of the year,” noting that Tesla’s deliveries exceeded production in the second quarter by 33,000 vehicles.
The analyst also highlighted the release’s “show stealer,” Tesla’s energy storage business, which posted record quarterly performance. The business, which includes utility-scale megapacks, is growing faster than the EV division and boasting record profit margins.
“Tesla is reminding investors that it’s more than just a car company, with strong second-quarter delivery results, a 33,000 drop in inventory, extensive storage, and Independence Day We started celebrating the day early,” Jonas wrote.
His team is “overweight” on the stock, with a price target of $310.
Tesla faces intense competition overseas from Chinese peers and a decline in demand for some electric vehicles in the United States. As part of its cost-cutting efforts, the company earlier this year embarked on a plan to cut more than 10% of its global workforce, which some analysts saw as a sign of tough times ahead.
the story continues
At Tesla’s shareholder meeting last month, CEO Elon Musk acknowledged that near-term demand and sales will still suffer somewhat as the industry is in transition.
The company also lowered prices last year to promote sales.
Dan Levy, senior equity research analyst at Barclays, told Yahoo Finance on Tuesday: “The risk of further price declines remains and further questions remain about the fundamentals. “We are facing winter-like conditions.” “The results are good, but I think the fundamental macro backdrop remains the same.” Levy rates the stock an equal weight rating and has a price target of $180.
An unsold 2023 Model
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X @ines_ferre.
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