In May 2019, Tesla Inc!. Stock was selling for $185 and at some point in June 2019, the Shares traded around at $178. Fast forward to June 30 2020, Tesla Stock is expected to open with a monster gap up after the electric car maker crushed fourth quarter earnings both front and back.
Bulls And Bears
For example, longtime Tesla bullish analyst Baird Ben Kallo may regret his decision to downgrade the stock after it reached around $500 a share.
“Elon Musk regretted Tesla analysts’ lack of in-depth and objective analysis,” Kallo wrote in a research report on Thursday. “We accept the criticism despite our decision to downgrade when shares were around $150 lower.”
Kallo shouldn’t feel that bad despite sharing Hold’s equivalent rates. He joined the earnings report with one of the Street’s highest price expectations. He subsequently raised his price target from $525 to $650 per share and raised his 2020 earnings estimate from $5.41 to $8.58 per share, up over 58 percent.
J.P. P. Morgan analyst Ryan Brinkman has also raised his target share price to $260 after the earnings report, but by only $20. He also rates Tesla’s stock equivalent to Sell.
“Management commented that it expects positive quarterly net income and free cash flow to continue, except during the quarters that include the launch and ramp of new products,” Brinkman wrote.
Joseph Spak, an analyst at RBC Capital Markets, wrote that some of his conclusions on Tesla were “misguided,” while he held a stock underperformance ranking.
“We fully admit things are better than we expected and there is a lot of positive news flow and data points going Tesla’s way,” he wrote in a note to clients. Highlights from the report included Tesla’s commentary about increased production capacity and an earlier time frame for Model Y deliveries, but downsides included indications that Shanghai Model 3 production may not have a better margin profile than California production.
Canaccord Genuity’s Jed Dorsheimer said that the biggest near-term risk for Tesla is its expectation for a one- to one-and-a-half week delay in the ramp of Shanghai Model 3 production due to the coronavirus outbreak.
“Given the numerous positive data points that were discussed and the cornerstone of continued profitability and [free-cash flow] generation, we view the company as solidly positioned as the leader of the EV revolution,” he wrote. Dorsheimer rates the stock a buy while lifting his target to $750 from $515.
Wedbush analyst Daniel Ives did not hold back in his praise for the company, even though he remains on the sidelines. “Last night completes a ‘comeback story for the ages’ from the dark days seen last April, with clear momentum around global electric-vehicle demand inflection heading into 2020 and beyond with Tesla leading the charge,” he wrote.
Ives expects Tesla’s “bull party” to continue as Shanghai demand looks “very strong.” He was encouraged by the company’s 22.5% automotive gross margin, which he said was “extremely impressive on the heels of the lower-margin Model 3 shift.”
He raised his target on Tesla’s stock to $710 from $550, while keeping a neutral rating. Still, Ives said a run up to $1,000 is within the realm of possibility.
“In our opinion, the new long-term bull case scenario on the stock is $1,000 with Tesla’s ability to ramp production and demand in the key China region during the course of 2020/2021 a major swing factor on the stock and $20 of earnings power by 2024,” Ives wrote.