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Breaking even seems possible for the second quarter, according to a leaked email from Tesla CEO Elon Musk. That is fueling a mini rally in Tesla stocks. A big enough profit in the second quarter could cause Tesla shares to join the S&P 500.
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A leaked email is fueling a mini rally in electric vehicle pioneer Tesla’s shares on Monday, pushing pioneer EV’s stock above $ 1,000.
Electrek reported that Tesla CEO (ticker: TSLA) Elon Musk wrote to employees: “Breaking down even looks very tight. It really makes a difference for every car you build and deliver. Please do your best to ensure victory!
For investors, the break-even point is a great result for a quarter marred by the global pandemic, plant closings, and falling demand for all cars. Wall Street expects Tesla to lose around $ 1.16 a share in the second quarter.
Tesla deliveries, prior to Covd-19, second-quarter earnings were expected to be nearly $ 2 a share. Additionally, vehicle deliveries were expected to be approximately 125,000 units in the second quarter. Delivery estimates fell to less than 70,000 as the quarter unfolded. The average estimate for analyst delivery is approximately 72,000 vehicles.
“Amid reports of a robust June, Tesla [second-quarter] deliveries may be in the range of 90,000 to 100,000 units, before the sale-side and buy-side consensus, “Credit Suisse analyst Dan Levy wrote in a research report Monday, adding that a profit from Second trimester no longer appeared as a “radical idea. ”
The buy side refers to Levy’s customers. They buy their research. The selling side refers to analyst pairs from Levy’s Wall Street. Levy rate shares the equivalent of Hold and has a price target of $ 700 for the shares.
Tesla needs to post earnings of not less than $ 1.41 per share in the second quarter to qualify for inclusion in the S&P 500. One of the criteria for inclusion in the index is positive GAAP earnings.
GAAP is short for generally accepted accounting principles. Tesla has earned $ 1.42 in diluted GAAP earnings per share in the past three quarters.
Inclusion in the S&P 500 could drive shares higher and after Tesla’s second-quarter delivery report, due in the coming days. S&P 500 index funds could begin preparing for index listing if deliveries exceed estimates. The magnitude of any increase in technical factors such as the inclusion of the index is difficult to measure.
Tesla not being on the index is, frankly, a bit strange. It is the second largest automotive company in the world by market capitalization, behind only Toyota Motor (TM).
Tesla’s $ 187 billion market capitalization would place it in the top 30 stocks in the S&P 500. It would also rank 17th in the Dow Jones Industrial Average.
Tesla shares rose 2.2% to $ 1,031.90 in early trading Tuesday, and the year-to-date profit is approximately 146%.
Write to Al Root at [email protected]
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