After experiencing a series of six consecutive losses, Tesla (TSLA) stock surged on Monday, reflecting renewed investor enthusiasm surrounding the impending launch of the Cybertruck and an upgraded Model 3 in China.
In a remarkable turnaround, TSLA shares gained an impressive 5.3% in Monday’s market trade, largely attributed to the insights provided by Baird analyst Ben Kallo. Kallo highlighted several pivotal factors anticipated to drive the company’s performance during the latter half of the year. While the ongoing narrative of vehicle price reductions and pressure on Tesla’s gross margins continues, the much-anticipated debut of the Cybertruck in the third quarter and other contributing elements could potentially propel TSLA stock to new heights. Maintaining an optimistic outlook, Baird maintains an “outperform” rating for TSLA, setting a price target of $300, representing a remarkable 39% increase from the current trading value.
A wave of excitement has been generated by numerous sightings of Cybertrucks on roads across the United States. This heightened anticipation for the vehicle’s launch has been palpable on social media platforms. Notably, a Cybertruck was recently spotted in Iceland, potentially as part of a promotional video, further augmenting the fervor surrounding the futuristic electric truck.
Tesla’s aspirations extend to the Chinese market as well. The imminent release of an updated Model 3, codenamed “Highland,” has already sparked interest, with local reports indicating that some stores have begun accepting reservations for the vehicle. According to credible sources, mass production of the enhanced Model 3 is slated to commence in September. This strategic move not only underscores Tesla’s commitment to the world’s largest electric vehicle market but also indicates its eagerness to capitalize on the burgeoning demand for sustainable transportation options.
The recent trajectory of TSLA stock, marked by a pullback following the release of the second-quarter financials on July 19, has raised concerns among investors. Despite the company’s impressive earnings and revenue that exceeded projections, apprehensions about declining gross margins have overshadowed its achievements. Speculation also surrounds the influence of sales from Cathie Wood’s ARK Invest ETFs, which may have contributed to the downward momentum.
Tesla’s stock value experienced a significant dip of more than 11% to $215.49 during the previous week, following a streak of six successive losses. Notably, the stock is currently trading above its 200-day moving average. However, the current value represents the lowest point since the closure at $213.97 on June 2. Just a fortnight ago, Tesla’s stock price fell below the support level of its 50-day and 10-week moving averages, indicating a sell signal according to an analysis by IBD.
Despite the recent market turbulence, Wedbush analyst Daniel Ives remains resolutely bullish on Tesla’s prospects. Ives expressed his perspective on CNBC, attributing the recent downturn to post-quarterly sell-off concerns and unease about the company’s performance in China. In Ives’ view, the current circumstances present an opportunity rather than a setback, confidently asserting that Tesla’s stock is undervalued and a strong contender for investment at its present levels.
As Tesla navigates through the dynamic landscape of the electric vehicle industry, the coming months are poised to witness whether the promising prospects associated with the Cybertruck and Model 3 in China can reignite the momentum of TSLA stock and reinforce its position as a trailblazing force in sustainable transportation.
Source: Investor’s Business Daily