Stock trading is all about preparing for the bad news, making the right moves, and waiting for the good news. There is nothing like a bullish picture to lighten up investors.
Baird analysts have painted a bullish picture of Tesla (TSLA), causing its shares to soar 1.3% to touch $343.85 per share on Wednesday, July 26.
Faster Margin Growth Expected with Model 3
Analysts believe, and Elon Musk himself expects, that the margins of the new Model 3 would grow faster than Tesla’s Model S and Model X. That is the intention behind the design and conception of the Model 3 anyway. It is a mass market model that can bring electric mobility to the public, unlike the Model S and Model Z that were prohibitively expensive and whose buyers were a few well heeled individuals.
Tesla needs margins to become profitable. Analysts at Baird are confident that the Model 3 will achieve these margins faster. The company’s second quarter results are to be released on the 2nd of August and one Baird analyst suggests investors buy Tesla stock now since it could surge later on. The analyst maintains an outperform rating, a $368 price target.
Approximate Gain of 50% Currently Experienced
The $343.85 per share value depicts a gain of approximately 50% over the latest 12-month period as well as a 61% year-to-date gain. This is in spite of a big sell-off from late June to early July. However, there was a worry for investors about a battery pack shortfall that resulted in lower-than-expected shipments of vehicles in Q2.
Some Analysts Bearish on TSLA
UBS analysts are bearish, and reiterated a price target of $185 and a sell rating on Tesla shares on Wednesday, July 26. One of these analysts is expecting a wider annual and quarterly loss per share and predicts the Q2 cash burn to be more than double that of Q1, leading to stock dilution.
However, as more details of the Model 3 are released, Tesla stock could only be benefited. The “Handover Party” for the Model 3 could send the stock to a big rally.
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