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Tesla Stock Rose Due to Analyst Upgrade: Will It Continue?

Ambrish Shah - Author

Jul. 24 2020, Updated 11:22 a.m. ET

Tesla (NASDAQ:TSLA) stock rose 5% in the pre-market trading session at 8:43 AM ET today. Tesla stock rose after Alexander Potter of Piper Sandler raised his target price on the stock from $939 to $2,322. However, the analyst reiterated his “overweight” rating on the stock. The new target price represents a 12-month return potential of 55.1% from the closing price of $1,497.06 on Monday.

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According to a report from TheFly, “Tesla is the most consequential company in the mobility ecosystem, and this is unlikely to change in the next decade…As a result, the analyst does not recommend selling the shares despite the 260% rally year-to-date.” The report also said, “His increased price target reflects faster than expected share gains and an analysis of Tesla’s software opportunity. It’s hard to see how competitors can catch up, says Potter, who believes that Tesla’s own capacity is its biggest constraint to share gains.”

Other analysts’ recommendations for Tesla stock

Earlier this month, Morgan Stanley raised its target price on Tesla stock from $650 to $740. Deutsche Bank, J.P. Morgan, and Wedbush also raised their target prices. Overall, analysts’ consensus target price was $784.81, which represents a downside potential of 47.6%. Meanwhile, Wall Street is bearish on Tesla. Among the 33 analysts, 27% recommend a “buy,” 36% recommend a “hold.” and 37% recommend a “sell.”

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Stock performance

On Monday, Tesla stock lost 3.1% and closed at $1,497.06 with a market cap of $277.5 billion. Tesla’s stock price has risen by 9.2% in the trailing five-day period, while it has risen by 510.9% in the trailing 12-month period. The stock is trading 16.6% below its 52-week high of $1,794.99 on Monday. The stock was also trading 609.5% above its 52-week low of $211.00 on August 23, 2019. So far this year, the stock has risen by 257.9% as of Monday.

Based on the closing price on Monday, Tesla stock was trading 27.8% above its 20-day moving average of $1,171.70. The stock is also trading 52.9% above its 50-day moving average of $978.97 and 85.9% above its 100-day moving average of $805.46. With a 14-day relative strength index score of 79, Tesla stock is overbought.

Tesla stock has a lower Bollinger Band level of $746.61, while its middle Bollinger Band level is $1,142.66. On Monday, Tesla stock closed near its upper Bollinger Band level of $1,538.70, which also suggests that it’s overbought.

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Wall Street analysts expect Tesla to post sales of $5.15 billion in the second quarter—a reduction of 18.8% YoY (year-over-year) compared to $6.35 billion in the second quarter of 2019. Also, analysts expect the company to report non-GAAP EPS of -$0.71 in the second quarter compared to -$1.12 in the second quarter of 2019.

At 9:08 AM ET today, the S&P 500 futures fell 0.37%, while the Dow futures fell 0.08%.

Read Can Focusing on Quality Place NIO above Tesla in China?, Buffett Might Own Tesla as ‘Cross Section of America’, and Are NIO and Tesla Defying the Downtrend in China’s NEV Market? to learn more.


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