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Is Tesla Stock a Buy or Sell at These Prices?

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On Tuesday, Tesla (NASDAQ:TSLA) stock gained 9.1% and closed at $709.89 with a market cap of $130.7 billion. The Dow Jones Industrial Average rose by 559 points or 2.4%. Meanwhile, the S&P 500 and the Nasdaq Composite gained about 3.1% and 4.0%, respectively. The broader markets recovered due to optimism that the COVID-19 situation is improving in the US. Read COVID-19 Impacts US Stock Markets and Economy to learn more.

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Tesla’s stock price has risen by 37.5% in the trailing five-day period, while it has risen by 165.2% in the trailing 12-month period. The stock is trading 26.7% below its 52-week high of $968.99 on February 4, 2020. The stock is also trading 301.1% above its 52-week low of $176.99 on June 3, 2019. On a YTD (year-to-date) basis, the stock has risen 69.7% as of Tuesday.

Analysts’ recommendations for Tesla stock

As of Tuesday, 34 analysts cover Tesla stock. Among the analysts, 15 recommend a “hold,” eight recommend a “buy,” and 11 recommend a “sell.” Analysts have an average target price of $466.05 on Tesla. The target price implies a return of -34.3% based on the closing price of $709.89 on Tuesday. The consensus target price for the stock has fallen from $503.67 in March—a fall of 7.5%.

On Tuesday, Goldman Sachs analyst Mark Delaney initiated coverage on Tesla stock with a “buy” rating and a target price of $864. According to a report from TheFly, “The analyst is positive on the company’s product lead position in electric vehicles – a market where he expects long-term secular growth.” The report also said, “Delaney further cites Tesla’s early mover advantage, brand recognition, vertical integration, as well as traction from its Model Y launch in the important SUV and crossover market.”

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On Tuesday, Tesla stock rose 9.1% after Credit Suisse analyst Dan Levy upgraded the stock to “neutral” from “underperform.” The analyst also increased its target price on the stock from $415 to $580. According to a report from TheFly, Levy “believes the company competitively has more edge in the transition to electric vehicles amid the COVID-19 disruption. Nonetheless, the analyst still expects demand to soften in the second quarter and believes Tesla could see supply shortages if the shutdown lasts until June.”

Last week, Jefferies analyst Philippe Houchois also upgraded Tesla stock to “buy” with a target price of $650. Read Tesla Has Risen 5% Today, Jefferies Analyst Upgraded the Stock to learn more.

Analysts’ expectations for Q1

Tesla will likely report its first-quarter earnings results by the end of this month. Analysts expect the company to report revenue of $6.0 billion in the first quarter of 2020—a rise of 32.1% from $4.54 billion in the same quarter the previous year. Analysts also expect that Tesla will report an adjusted EPS of -$0.18 during the quarter compared to -$1.77 in the same quarter in 2019.

Tesla’s stock performance

Tesla stock closed 39.8% above its 20-day moving average of $507.71 on Tuesday. However, the stock was 9.5% and 31.0% above its 50-day and 100-day moving averages of $648.24 and $541.72, respectively. The company’s 14-day MACD is 104.02, which suggests an upward trading pattern. With a 14-day relative strength index score of 66, the stock is approaching the overbought level.

Tesla has an upper Bollinger Band level of $663.01. The company’s middle Bollinger Band level is $507.71, while its lower Bollinger Band level is $352.41. On Tuesday, Tesla stock closed near its upper Bollinger Band level, which also indicates that the stock is overbought.

Currently, Tesla stock is trading at 240.55x its 2020 estimated adjusted EPS of $2.95. The stock is trading at 64.08x its 2021 estimated adjusted EPS of $11.08. Wall Street analysts expect Tesla’s earnings to grow at a CAGR of 389.5% over the next five years.

Tesla stock rose by 7.0% in the pre-market trading session today at 7:51 AM ET. According to a Reuters report, Tesla’s China car registrations increased to 12,709 units in March—up from 2,314 units in February.

Read Tesla’s Q1 Deliveries: Another Jolt for Short Sellers and TSLA Stock: Technicals Show Trouble for Short Sellers to learn more. You can also read Why Tesla Stock Can Survive the Coronavirus Scare.

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