10 Jun

Wall Street Weighs In: Why Tesla Stock Is Rallying Today

WRITTEN BY Jitendra Parashar

Tesla stock today

Today, Tesla (TSLA) was rallying for its third consecutive session. At 12:17 PM ET, Tesla stock was up 5.2% for the day, compared to 0.9% and 1.8% gains in the S&P 500 Index and the NASDAQ Composite index, respectively.

Meanwhile, General Motors (GM), Ford Motor Company (F), Fiat Chrysler Automobiles (FCAU), and Toyota (TM) were also trading on a positive note. GM, Ford, FCAU, and TM were up 2.3%, 1.4%, 1.9%, and 1.1%, respectively, for the day.

Why is Tesla stock rallying?

Earlier today, a couple of brokerage firms expressed their optimism about Tesla’s car demand.

Roth Capital Partners analyst Craig Irwin upgraded his recommendation on Tesla stock to “buy” from “neutral” while maintaining a price target of $238, Teslarati reported. The analyst is optimistic about demand for Tesla vehicles in the Chinese market.

Plus, Baird analyst Ben Kallo believes that “Model 3 demand is underestimated” despite a softening Model S and X demand. Kallo has given a price target of $340 for Tesla stock.

Model 3 demand

These Wall Street analysts’ positive views on Tesla come a few days after an Electrek report noted that TSLA has already delivered nearly 33,000 units in North America in the second quarter so far. According to the report, Tesla plans to deliver another 33,000 cars in North America this month, which implies that Tesla’s second-quarter car deliveries are likely to be much higher than its first-quarter deliveries.

In the quarter that ended in March 2019, the company delivered 63,019 cars globally, up 110.1% on a year-over-year basis but down 30.7% sequentially.

In May, Tesla stock fell sharply, by 22.4%, as reports about weakening Model 3 demand hurt investor sentiment. A positive change in analysts’ views regarding Model 3 demand could keep Tesla stock be on the sharp recovery path in the near term.

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