If you are wondering why Tesla’s stock (TSLA) is up this morning, it’s partly thanks to Wedbush who raised its price target on Tesla over more optimism in China and Europe.
Tesla had a good week on the stock market after announcing its 5-for-1 stock split last week.
The stock is extending the run to this week after rising by as much as 2% in pre-market trading after Wedbush came out with a new note.
Analyst Dan Ives wrote:
“We continue to believe EV demand in China is starting to accelerate in July/August with Tesla competing with a number of domestic and international competitors for market share with Giga 3 remaining the linchpin of success which remains the prize that Musk and Tesla are laser focused on capturing.”
We don’t know about August yet, but the numbers for July are out and Tesla is still dominating the EV market in China with over 11,000 deliveries.
Sales are also stabilizing month-to-month thanks to local production at Gigafactory Shanghai.
Ives also didn’t fall for the narrative that Tesla is doomed in Europe due to the new competition hitting the market and sales sliding badly in the first half of the year.
We reported on this issue last week. It is partly explained by Tesla’s Fremont factory shutdown happening during European model batch production – resulting in much lower supply in Europe on top of the pandemic.
Ives believes that Tesla is back on track for its goal of 500,000 car deliveries in 2020:
“The key bogey to hit ~500k deliveries globally for the year now appears back on track despite this turbulent COVID backdrop,”
The analyst increased his price target on Tesla from $1,800 to $1,900 per share, one of the highest on Wall Street.
I am glad to see that some analysts are not falling for the narrative that demand is in free fall for Tesla in Europe, which has been pushed by the shorts a lot recently.
We should see a good uptick in Q3 and combined with a strong quarter in China, Tesla should have a new all-time record for deliveries.
But Q3 results are not the next important catalyst for Tesla anyway. We have Battery Day coming before that and I expect it to be a way bigger deal.
I think the next big catalysts are:
- Battery Day
- Q3 results,
- Model Y launch in China
Disclosure: I am long TSLA.
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