If you’re wondering why Tesla’s stock (TSLA) is up this morning, it’s partly thanks to Wedbush raising its price target on Tesla over more optimism in China and Europe.
Tesla had a good week on the stock market after announcing its 5-for-1 action split last week.
The stock extended its lead to this week after rising as much as 2% in pre-market trading after Wedbush came out with a new note.
Analyst Dan Ives wrote:
“We continue to believe that EV demand in China will start to accelerate in July / August with Tesla competing with a number of domestic and international competitors to market share with Giga 3 the linchpin of success remains, that remains the price that Musk and Tesla laser focused on it capture. ”
We do not know yet about August, but the figures for July are out and Tesla still dominates the EV market in China with more than 11,000 deliveries.
Sales also stabilize month after month thanks to local production at Gigafactory Shanghai.
Ives also did not fall for the narrative that Tesla is doomed to in Europe because of the new competition that hit the market and sales slipped in the first half of the year.
We reported on this issue last week. This is partly explained by Tesla’s Fremont manufacturing shutdown occurring during European model batch production – which resulted in much lower supply in Europe on top of the pandemic.
Ives believes Tesla is back on track for its goal of 500,000 car deliveries by 2020:
“The key bogey to hit ~ 500k deliveries worldwide for the year now appears to be back on track, despite this turbulent COVID background,”
The analyst increased its price target on Tesla from $ 1,800 to $ 1,900 per share, one of the highest on Wall Street.
Electrek’s Take
I’m glad to see that some analysts are not falling for the narrative that demand is in free fall for Tesla in Europe, which has been pushed a lot by the shorts lately.
We should see a good uptick in Q3 and combined with a strong quarter in China, Tesla should have a new all-time record for deliveries.
However, Q3 results are not the next major catalyst for Tesla. We got Battery Day ahead of it and I expect it to get a bit bigger.
I think the following major catalysts are:
- Battery day
- Q3 results,
- Model Y launch in China
Announcement: I’m long TSLA.
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