Two days ago, Tesla smashed Q2 earnings estimates by Wall Street analysts by posting surprise GAAP earnings per share of 50 cents, sending the stock up about 6% in aftermarket trading.
Yesterday, Piper Sandler analyst Alexander Potter raised the firm’s price target on Tesla to $2,400 from $2,322 and reiterates an Overweight rating on the shares.
According to Thefly: The analyst stills think Tesla “deserves ‘must own’ status” following last night’s Q2 results. While true that the company benefited from a high amount of credit-related revenue in the quarter and S&P 500 Index eligibility likely wouldn’t have been possible without that revenue, it is “undeniably impressive” that the company may still exceed 500,000 deliveries in 2020, Potter tells investors in a research note. The analyst says that with market share “inflecting “and self-driving roll-outs on the horizon, he “can’t envision” selling Tesla now.
Is it still safe to join the investors that bought way below $1000, by buying at this relatively short-term high price level?. The answer IMO is YES!.
Should in case you missed this breaking news, Moody has upgraded Tesla’s ratings including CFR to B2 and senior unsecured to B3; suggesting Tesla’s financial outlook is stable.
Moody’s upgrades Tesla’s ratings
According to SEC, Moody’s ratings provide predictive opinions on one characteristic of a corporate entity’s financial enterprise – its likelihood to repay debt in a timely manner. … It is crucial that our ratings be reliable in their aggregate probability assessments of credit risk.
So if your question is still about the safety of your investment, in relation to Tesla’s financial stance, I believe if Moody’s is positive about Tesla’s financial outlook, you can safely be positive as well.
Let me remind you that Tesla is growing massively time over time. Tesla is currently building a new factory in Europe, and according to the CEO Elon Musk, the made in Berlin Model Y will be revolutionary as it will be almost completely built differently than the Made in China/U.S.A Model Y.
Also, Tesla builds new factories with less amount of money and much faster. “Better factory for less money,” says Elon Musk during the Q2 calls. Every new factory adds value to the product.
Moody’s Investors Service (“Moody’s”) upgraded the ratings of Tesla, Inc., including the Corporate Family Rating to B2 from B3, and senior unsecured rating to B3 from Caa1, and the speculative grade liquidity rating to SGL-2 from SGL-3. The outlook is stable.
According to Moody’s, The upgrade reflects Tesla’s sustainable position in the auto industry as a specialized producer of pure battery electric vehicles (BEVs). However, preserving this strong position in BEVs in the face of emerging competitive challenges will depend on Tesla’s progress around manufacturing efficiency and product development to achieve even broader customer acceptance at an affordable price.
“Moreover, Tesla’s expansion prospects benefit from regulatory pressures on the auto industry to reduce emissions so Tesla’s advanced position in BEVs is an important factor at the higher rating. At the same time, the weak governance at Tesla also constrains the rating.” – Moody’s added.
Tesla is clearly putting in much more energy in the machines that build the machines. Tesla CEO Elon Musk has emphasized times without number how much Tesla factories are revolutionary. He is always on the lookout for smart people to work for Tesla.
- …. Corporate Family Rating, Upgraded to B2 from B3
- …. Probability of Default Rating, Upgraded to B2-PD from B3-PD
- …. Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
- ….Senior Unsecured Regular Bond/Debenture, Upgraded to B3 (LGD4) from Caa1 (LGD4)
- Outlook Actions: ..Issuer: Tesla, Inc.
- ….Outlook, Remains Stable
Tesla was down yesterday almost 5% and seems to be down about 4% at the moment in Pre-Market. This is surely a discounted price compared to where the Stock was trading yesterday when the market opened.
S&P 500 index falls 40 points: worst day since June as the surge in unemployment claims, coronavirus cases send Apple, Tesla, Microsoft Stocks down sharply. The broad market is presently down, Apple, Microsoft, Netflix, among others were also down yesterday about 4% each, and they are all down in Pre-Market trading as well. According to experts, the entire market is down due to the bad unemployment numbers posted yesterday.
If you have any questions, feel free to use the comment section.