TESLA STOCK CRACKS $200 AHEAD OF DELIVERIES. WHAT ELSE IS MOVING THE STOCK.

Tesla stock is above $200 as the EV maker gets ready to report second-quarter deliveries this week.

It’s a stock-moving event, but investors should consider whether the market has already moved on. Not even a bearish Wall Street report can knock down shares significantly.

Tesla typically reports global delivery results on the second day of a new quarter. For the second quarter, the most current Wall Street estimates point to about 420,000 cars delivered, down from some 466,000 delivered in the second quarter of 2023. Deliveries likely fell year over year for the second consecutive quarter.

Timing varies, but lately, Tesla has been reporting quarterly numbers at about 9 a.m. Eastern time.

Despite the pending news, Tesla shares have moved up about 18% over the past two weeks. Shares closed up 6.1% late Monday at $209.86, while the S&P 500 and Dow Jones Industrial Average rose 0.3% and 0.1%, respectively.

Shares closed at their highest level since Jan. 19, 2024, according to Dow Jones Market Data. The stock has now risen for five consecutive days.

Shares were rising despite a bearish report from Wells Fargo analyst Colin Langan. He wrote Monday that 2024 delivery estimates for Tesla are too high. He expects about 1.6 million cars sold this year, while the Wall Street consensus compiled by FactSet is for about 1.8 million units.

Slowing demand raises the risk that Tesla will keep cutting prices, he said. Langan rates shares Sell and has a $120 price target for Tesla stock.

The recent price action, and the Monday bounce, tell investors that, to some extent, other factors are more important right now.

“While difficult to quantify, we have joked that Roaring Kitty might drive an electric vehicle,” wrote Guggenheim analyst Ronald Jewsikow in a Monday report. He rates Tesla stock at Sell and has a $126 price target for the shares.

”Electric vehicle stocks have been highly correlated with the so-called meme-stocks on days when there is actionable news related to Roaring Kitty in the market,” he added. “Note that most other electric vehicle stocks are rallying today, albeit less than Tesla.”

Rivian Automotive shares rose 3.7% on Monday. The meme stock GameStop fell 5.3%.

Another factor is Tesla’s Aug. 8 robotaxi event, where the company will detail plans to capitalize on its self-driving software and technology. CEO Elon Musk has called self-driving cars a multitrillion-dollar opportunity which, based on recent trading, has excited investors.

“We believe the August 8th robotaxi day will be a key historical moment for the Tesla story that we see as a near-term catalyst,” wrote Wedbush analyst Dan Ives in a Friday report. “Ultimately the key to reaching a $1 trillion-plus valuation is the autonomous [driving] vision taking hold for Tesla, which appears to be turning a corner with this latest FSD [version] and now China FSD testing underway.”

FSD is short for full self-driving, Tesla’s highest-level driver assistance product.

Ives rates Tesla shares Buy and has a $275 price target for the stock. Morgan Stanley analyst Adam Jonas rates shares Buy and has a $310 price target. He is excited about the potential of Tesla’s nascent robot business. Tesla is developing a labor-saving robot it trains using artificial intelligence-based computing.

“Our thesis on Tesla is that it is both an auto stock plus an energy, A.I./robotics company,” wrote Jonas in a recent report. “In fact, our valuation of the core auto business ($67/share) represents just about 20% of our $310 price target.”

Although both Ives and Jonas are looking beyond second-quarter numbers, the delivery result will still matter, to some extent. Options markets imply shares will move 5%, up or down, following Tesla’s delivery report. Shares have moved an average of about 3%, up or down, following the past four reports. They dropped almost 5% after Tesla reported weaker-than-expected first-quarter deliveries.

The second-quarter earnings report comes a few weeks after the delivery news. It has even more potential to move the stock. Tesla shares have moved an average of 11%, up or down, following the past four quarterly reports.

As of the close on Monday, shares were down about 15% so far this year while the S&P 500 was up about 15%. Slowing sales growth and falling earnings estimates have weighed on investor sentiment.

Write to Al Root at [email protected]

2024-07-01T08:38:26Z dg43tfdfdgfd