With Tesla stock surging after earnings and on CEO Elon Musk's bullish comments regarding demand, a number of analysts revised price targets for the EV giant.
Last week, Tesla stock spiked 33%, rocketing above its 50-day moving average for the first time since September. Since hitting a Jan. 6 bear-market low at 101.84, TSLA shares have erupted for a 75% gain. On Monday, Berenberg analyst Adrian Yanoshik upgraded Tesla to "Buy" from "Hold" and lowered the price target to 200, down from 255. That was about 14% above where share traded on Monday.
Yanoshik regarded Tesla's decision to cut vehicle prices as an investment in growth. The analyst also expects Tesla to retain its gross and EBIT-margin lead over legacy carmakers.
Berenberg's decision to upgrade Tesla comes after three analysts increased price targets for Tesla stock late last week. Wedbush analyst Daniel Ives, a longtime Tesla bull, raised the firm's price target on Tesla to 200, up from 175 while maintaining an "Outperform" rating on TSLA shares.
Cowen analyst Jeffrey Osborne raised the price target to 140, up from the previous 122 target. Osborne kept a "Market Perform" rating on Tesla stock. Wells Fargo analyst Colin Langan also raised the firm's price target on Tesla to 150, up from 130.
Before Tesla earnings, a slew of analysts had slashed price targets. Tesla stock advanced early before falling 6.4% during Monday's market trading.
Tesla Stock Surges On Earnings
Late Wednesday, Tesla earnings slightly beat lowered analyst views, while revenue was roughly in line. However TSLA shares spiked as Musk turned bullish on demand following price cuts and predicted production of up to 2 million vehicles.
Meanwhile, the Securities and Exchange Commission (SEC) is now probing Musk's role in crafting Tesla's self-driving claims, Bloomberg reported Saturday.
Musk said during the earnings call Wednesday Tesla has deployed Full Self Driving (FSD) Beta for city streets to roughly 400,000 customers in North America.
The EV giant is currently at about 100 million miles of FSD, not including highway driving, according to Musk.
"We would not have released the FSD Beta if the safety statistics were not excellent," Musk said.
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Tesla Price Cuts
Tesla has slashed prices for the Model 3 and Y in China, with the base Model 3 cut more than 13% to $33,570. Weekly China EV registration data are set for release Tuesday for Tesla and other automakers. However, Tesla's Shanghai plant has been closed this past week for the Chinese New Year holiday.
The EV giant has also announced price cuts in the U.S. and Europe. This will make more models eligible for tax incentives of $7,500 under the Inflation Reduction Act (IRA).
The EV giant slashed U.S. Model 3 prices by 6%-14%, depending on the trim. A standard trim Model 3 RWD was cut by $3,000 to $43,990. With the IRA tax credit applied to the vehicle, consumers that meet income limits would be paying $36,240.
The Performance Model 3 trim was cut $9,000 to $53,990, getting under the $55,000 limit for tax credits. Meanwhile, Tesla's base Model Y has been slashed $13,000, or nearly 20%, to $52,990, also below the tax credit limit. The Performance variant for that vehicle has been cut to $56,990, also down $13,000.
Tesla Stock: Ford Responds
Musk told investors Wednesday that so far in January, Tesla has "seen the strongest orders year-to-date than ever in our history."
On Monday, Bloomberg reported that Ford is responding to Tesla with price cuts on average of $4,500 to its electric Mustang Mach-E.
This will bring the price of a base model Mach-E to $45,995, down $900, while the most expensive GT Extended Range version falls $5,900 to start at $63,995. The California Route 1 extended range version is marked down almost 9% to start at $57,995.
TSLA shares rank third in the Auto Manufacturers industry group. Tesla stock has an 58 Composite Rating out of 99. The stock has an 8 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 99.
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