Tesla (TSLA.O) shares gained 4.5% on Monday, snapping a six-session losing run, after stockbroker Baird Equity Research placed the stock to its "best ideas" list. Price reduction and their impact on margins, according to the brokerage, will drive the narrative in the second half of the year, but other potential catalysts for the company include the …
Tesla (TSLA.O) shares gained 4.5% on Monday, snapping a six-session losing run, after stockbroker Baird Equity Research placed the stock to its “best ideas” list.
Price reduction and their impact on margins, according to the brokerage, will drive the narrative in the second half of the year, but other potential catalysts for the company include the debut of Cybertruck, increased adoption of Full Self-Driving, and growth into new markets.
Tesla’s stock has surged over 85% this year, owing to rising sales despite a margin crunch and anticipation for more adoption of its autonomous driving software.
Bearish investors will point to lower production, according to Baird, although Tesla is still on track to meet its production target of 1.8 million vehicles this year.
Tesla ignited a price battle earlier this year and lowered prices on three models in China last week. On August 14, it also released a lower-priced Model S sedan and Model X SUV in an effort to increase demand and capture a larger portion of the market.
The shares of the world’s most valuable automaker have a forward price-to-earnings ratio of 50.15, compared to 26.58 for Apple (AAPL.O) and 6.14 for Ford Motor (F.N), making it more expensive.
The firm also stated that confidence for Rivian Automotive’s (RIVN.O) shares is improving, noting that cost savings have begun to materialize as the company brings key component production in-house.
Tesla Price Action
Since announcing second-quarter earnings on July 19, TSLA stock has been declining. Investor fears about declining gross margins overcame the global EV giant’s higher-than-expected earnings and revenue. The news of Cathie Wood’s ARK Invest ETF sales may have further fueled some negative momentum.
Last week, Tesla shares fell more than 11% to 215.49 after six consecutive declines. The stock is still trading above its 200-day moving average. TSLA is now at its lowest level since June 2, when it closed at 213.97. Tesla shares broke through support at its 50-day and 10-week moving averages two weeks ago. TSLA concluded the week more than 2% below its 10-week moving average, indicating a definite sell signal.
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