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The number of Tesla car registrations in China rose 450% in March to reach 12,709 units. Some analysts believe backsliding is unlikely to take place in the upcoming days. Now TSLA stock is rising.
On April 14, Tesla Inc (NASDAQ: TSLA) stock ended in the green. The car giant’s shares rose by as much as 9.05% to $709.89. Today in pre-market, TSLA stock rises further, being 5.16% up at the moment of writing, with a price of $746.52.
Tesla stock has been enjoying growth since the start of the week. On Monday, TSLA stock jumped 13.60% to trade slightly above $650 per share. In the previous five trading sessions, Tesla has gained nearly 30% of its price. On Tuesday, it was 5.88% up in the pre-market trade and jumped further after the opening. Today, TSLA stock rises again, and some analysts believe backsliding is unlikely to take place in the upcoming days.
There are several factors that are conditioning the present growth of Tesla shares.
Why TSLA Stock Rises
Firstly, the number of Tesla car registrations in China rose 450% in March to reach 12,709 units. In comparison, it was 2,314 in February. In the U.S., the Tesla factory has suspended production. However, it resumed its activity in China and started sales of two more Model 3 cars its Shanghai plant produces. The overall auto sales in China plunged 43.4% in March because of the coronavirus pandemic, but even despite this drop, Tesla managed to get profits.
Secondly, some analysts have not only maintained but also increased their price target for Tesla, which has worked to the good of the company’s stock. For example, analyst Colin Rusch kept his “overperform” rating on Tesla, his price target makes up $684, about 5% higher than Monday’s closing price.
Another analyst Ari Wald believes that while the stock is above the $390 support level, it remains bullish. Credit Suisse analyst Dan Levy upgraded the company to “neutral” from “underperform.” His prediction is a $580 price target.
“We are positive on Tesla because we believe that the company has a significant product lead in EVs, which is a market where we expect long-term secular growth.”
“We also note that Tesla’s EBITDA margin in 2021E screens relatively well vs. these peers.”
Comparing Tesla with other automakers, Delaney said it is attractively valued with its revenue growth.
Around April 29, Tesla will deliver its first-quarter earnings report. It will probably miss its annual deliveries target of 500,000 because of issues caused by the coronavirus pandemic. But as Loup Ventures Managing Partner Gene Munster stated, in contrast with other automakers, Tesla will show a much better performance.