Tesla Delivery Announcement Propels Shares Upward, Ignites Wall Street Debate

Tesla Delivery Announcement Propels Shares Upward, Ignites Wall Street Debate

Tesla delivery reported approximately 444,000 vehicles to customers in the second quarter, surpassing the consensus forecast of 438,000 vehicles. While this represents a roughly 5% decline year over year, it exceeded many lower estimates that ranged around 415,000 vehicles, providing a significant relief to investors.

Stock Surge and Market Reaction

Tesla’s stock surged 10% on Tuesday, with shares reaching as high as $248.35 on Wednesday, just 13 cents shy of their 2023 year-end close. This marks a remarkable recovery for a stock that dipped below $140 a share on April 22. Tesla shares closed up 6.5% at $246.39 on Wednesday, while the S&P 500…

The stock has been climbing for seven consecutive trading days, adding nearly $30 billion to CEO Elon Musk’s net worth, thus propelling him to the top spot among the world’s wealthiest individuals, overtaking Jeff Bezos, acording to WSJ Subscription Deals.

Wall Street Analysts Weigh In

Positive commentary from Wall Street is bolstering the shares. The majority of opinions regarding Tesla’s delivery results have been favorable.

With most of the price reductions behind us and global EV demand stabilizing, particularly in China, we anticipate Tesla’s march towards a 2 million unit annual run rate will be achieved in the upcoming quarters, stated Wedbush analyst Dan Ives. He rates the stock as a Buy and raised his price target to $300 from $275 a share.

CFRA analyst Garrett Nelson also rates the shares as a Buy, increasing his price target to $250 a share from $230. The delivery numbers “greatly alleviate concerns about weakening EV demand,” he wrote in a Tuesday report.

Divergent Views on the Stock’s Future

Not all opinions were as optimistic. A 5% delivery decline never looked so good, noted Guggenheim analyst Ronald Jewsikow. He believes much of the 10% surge was due to record energy-storage deployments rather than car sales. Tesla sold 9.4 gigawatt hours of storage in the second quarter—a record compared to the previous high of 4.1 gigawatt hours. Such a significant increase could lead to higher sales and earnings estimates, according to Jewsikow. He rates Tesla stock a Sell and has a $134 price target.

Wells Fargo analyst Colin Langan also rates the shares a Sell with a target of $120. Langan had projected 385,000 deliveries for the second quarter, so Tesla exceeded his estimate. Yet, he remains skeptical about Tesla achieving 1.8 million sales in 2024—the current consensus.


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Broader Analyst Consensus and Technical Analysis

More than 40 analysts cover Tesla stock, according to FactSet. Most will publish reports on the delivery numbers, but the consensus is that it was a victory for Tesla. With shares around $235 each in premarket trading, investors are contemplating the potential for further gains or whether the rally will lose momentum. Tesla stock has risen for six consecutive days, gaining almost 27% during this period.

Tesla is testing a long-term downtrend line, says Fairlead Strategies founder and technical analyst Katie Stockton. A couple of weekly closes solidly above $226 would be a bullish reversal. She isn’t making a fundamental call on Tesla stock. Technical analysts study charts to gauge where investors have historically bought and sold shares and to predict short- and medium-term movements. The downtrend line originates from the 2021 highs when shares were above $400 each. Maintaining levels above $226 would be a positive indicator, says CappThesis founder Frank Cappelleri.

Upcoming Events Could Influence Stock Movement

Some price stability following the deliveries would be encouraging for bullish investors. However, several upcoming events could influence Tesla stock in either direction. Earnings will be announced later this month, with Wall Street expecting earnings per share of 60 cents. The robust delivery and energy-storage results will make achieving or surpassing this figure more likely.

Then there is the Aug. 8 robotaxi event. How Tesla delivery will charge for the service, vehicle uptime, and costs associated with paying drivers for using their vehicles in the [robotaxi] fleet [are unknown],” wrote Baird analyst Ben Kallo on Tuesday. We expect Tesla will defer discussing these and other details until the unveiling event.

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