Analysts’ ratings on Tesla stock

According to data compiled by Reuters as of July 10, about 35% of the analysts covering Tesla (TSLA) recommend a “buy,” 35% recommend a “hold,” and 30% recommend a “sell.”

The ratings were based on the consensus of 26 Wall Street analysts covering Tesla stock.

Tesla: Analysts’ Ratings after the China Factory Announcement

No upside potential

As of July 10, Tesla’s 12-month consensus target price was $290.32, which was already ~10% lower than its market price of $322.47. In the last three months, analysts’ consensus target for Tesla’s stock price fell from $320 to $290.

Analysts’ skepticism about Tesla’s ability to sustain the high Model 3 production rate could be one of the reasons why analysts’ consensus target is lower than the stock’s market price.

After being under pressure in the first quarter, the stock outperformed all of the auto stocks in the second quarter. Investors’ high expectations from the company’s production and deliveries data kept its stock soaring in the second quarter.

Notably, Tesla stock delivered a handsome positive return of ~28.9% in the second quarter. The gains were much higher than the broader market and other mainstream automakers (XLY). In comparison, the S&P 500 Index had a 2.9% return, while Fiat Chrysler (FCAU), Ford (F), and Toyota (TM) fell 7.9%, 0.1%, and 1.2%, respectively, in the second quarter.

Second-quarter earnings should remain in focus

As mentioned above, Tesla’s ability to sustain its high vehicle production rate could continue to be the key focus for investors in the third quarter. Also, the company’s second-quarter results could give a clear direction to its stock price in the coming weeks.

Tesla is expected to release its second-quarter earnings report in the first week of August. Please visit Market Realist’s Autos page for ongoing updates on the auto industry.

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