Shares of Tesla Inc. rose on Thursday after an explosive earnings report on Wednesday night, prompting large numbers of Wall Street analysts, both bulls and bears, to raise their stock price targets.
However, the average target remained well below current prices, suggesting that most analysts believe the stock is overvalued.
The electric vehicle maker reported a surprise second-quarter profit on Wednesday night, sales fell less than expected, and said it had the capacity to deliver more than 500,000 vehicles this year. The results put Tesla on a course to join the S&P 500 benchmark.
read more: Elon Musk doesn’t want Tesla to be ‘super profitable’ as it skyrockets towards a $ 300 billion valuation.
See related: Tesla Selects Austin, Texas As Next ‘Gigafactory’ Location.
The action
TSLA
it recovered 3.1% in morning trading, but slashed gains of up to 7.8% in the Wednesday after-hours session, minutes after the second-quarter report was released.
Not less than 14 of the 33 analysts surveyed by FactSet have raised their price targets after the results, including those who are bullish, neutral and bearish on the stock. That raised the average to $ 1,152.10 from $ 751.48 at the end of June, but that target was still 28% below Wednesday’s closing price of $ 1,592.33.
Among the bulls, analyst Colin Rusch at Oppenheimer more than doubled his target to $ 2,209, which is 39% above Wednesday’s close of $ 968. He reiterated his overweight rating on stocks for at least the past few years. last two years.
“We believe [Tesla] it continues to expand its product and process technology advantages as it disrupts the transportation industry by being better, faster, and cheaper than competitors, “Rusch wrote in a note to customers.
Rusch is a minority among analysts covering Tesla, as only 7 out of 33 analysts are bullish, compared to 15 who rate the stock as the equivalent of hold and 11 who are bearish.
Among those bears, JP Morgan’s Ryan Brinkman raised his target to $ 325, which was 80% below Wednesday’s close of $ 295. He has had an underweight stock rating for at least the past three years.
Brinkman said on a closer look, the “blatantly sharp earnings hit,” Tesla reported amid a challenging macro environment, fueled by “much higher-than-expected regulatory credit sales, which tend to be bulky and expected to decrease over time. “
He said that despite the “really better” results, the stock remains “significantly overvalued.”
Meanwhile, Wedbush analyst Dan Ives said Tesla Chief Executive Elon Musk hit a home run with the earnings report as the company continues to challenge skeptics as it surprisingly resets its 2020 delivery target of 500,000 vehicles, but maintained the neutral rating it has had in stock since April 2019.
But it raised its target price to $ 1,800, which is 13% above Wednesday’s close of $ 1,250.
Tesla shares have soared nearly four times (up 293%) this year through Wednesday. In comparison, General Motors Co. shares have fallen 28%, and Ford Motor Co. has sunk 26%, while the S&P 500 Index has gained 1.2%.
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