Tuesday, May 21, 2024
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Tesla surges after Elon Musk says new affordable EV models coming

Tesla shares rose 12% on Wednesday after CEO Elon Musk announced plans to produce new inexpensive EV vehicles by early 2025.

Musk’s comments came on Tesla’s earnings call on Tuesday, following the company’s poor first-quarter results. Revenue declined 9% year on year, marking the largest yearly decline since 2012.

The business had originally planned to begin production of the new EV cars in the second half of 2025. Tesla has not revealed any information about the inexpensive new models in development. Typically, the corporation advertises design concepts years before production through “unveiling” events.

Tesla announced adjusted earnings per share of 45 cents on $21.3 billion in revenue, falling short of LSEG’s expectations of 51 cents per share and $22.15 billion in sales.

Revenue fell from $23.3 billion a year ago to $25.17 billion in the preceding quarter.

Bank of America analysts wrote in an investor note on Wednesday that Tesla’s first-quarter results and leadership commentary “addressed key concerns” and “revitalized the growth narrative,” causing them to raise the stock from neutral to buy while keeping their $220 price target.

They also expressed confidence that Tesla has a solid business outlook as it prepares to launch new vehicle models and license its driver assistance technology.

“In the near-term the tide in news flow appears to suggest the risk to the stock is skewing more positively,” the analysts wrote in a note.

On Tuesday, UBS analysts confirmed their neutral rating for Tesla stock and reduced their price target to $147 from $160, citing their continued skepticism of the company’s claims.

“Increasingly, TSLA is a play on autonomy, and while progress is being made, we are cautious on near-term viability,” they stated in an e-mail. “We see limited growth for current lineup and lack of clarity on what these ‘new vehicles’ could bring.”



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