Tesla stock rallied above a buy point Wednesday as Stifel initiated coverage of the EV giant with a buy rating and a 265 price target. TSLA edged lower early Thursday.
Tesla reports second-quarter global deliveries next week and analysts are cutting estimates days ahead of the release.
Stifel on Wednesday backed up its buy rating and 265 Tesla stock price target on the belief that a revamped Model 3 and upcoming Model Y refresh could bolster EV unit sales. The firm wrote it believes Tesla is well positioned to deliver multiyear growth in 2025-2027.
Stifel also says Tesla's Full Self-Driving, or FSD, and "robotaxi" autonomous driving efforts have the potential to generate significant value through sales and possible licensing agreements.
The bullish note came a day after Tesla recalled more than 11,000 of its Cybertruck vehicles due to windshield wiper issues and improperly attached trim.
Tesla Deliveries Due
Meanwhile, the EV giant is expected to report Q2 deliveries on July 2.
As of Thursday, analysts predict global Q2 Tesla deliveries will total 436,000 vehicles, according to FactSet. The consensus view was 443,000 deliveries on Tuesday. Analyst consensus has dropped 3% since the end of May.
The current estimate would be down 6.5% compared to last year's 466,140 deliveries. However, it would be a 13% increase compared to Q1.
Tesla hit a record 484,507 deliveries in Q4 2023. The company reported in early April that global first-quarter deliveries totaled 386,810, undercutting even the lowest estimates and marking the lowest quarterly deliveries since 344,000 in Q2 2022.
Tesla ended the first quarter with a global vehicle inventory of 28 days, up 87% compared to Q1 2023. Auto gross profit margins, excluding regulatory credits, came in at 16.4%, above expectations of 15.9%.
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Tesla Stock Performance
TSLA edged down 0.6% during premarket action on Thursday. On Wednesday, Tesla stock gained 4.8% to 196.37, angling above a buy point. In June, shares have now advanced 10.3%.
MarketSurge charts show Tesla stock has been notching tight weekly closes in a seven-week consolidation. Investors could plot a handle buy point at 191.08.
Tesla stock has rallied since reporting first-quarter earnings and revenue on April 23, finding support just above its 50-day moving average.
However, Tesla stock is still below a declining 200-day moving average.
Tesla shareholders recently voted in favor of giving Musk his 2018 $56 billion pay package and reincorporating the EV giant in Texas, moving it from Delaware.
With the company's annual meeting in the rearview mirror, analysts are looking to Tesla's second-quarter earnings in mid-July. The company will also unveil its "robotaxi" on Aug. 8.
Tesla stock ranks sixth in the 35-member IBD Auto Manufacturers industry group. The stock has a 55 Composite Rating out of a best-possible 99. Shares have a 24 Relative Strength Rating and a 62 EPS Rating.
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