Tesla Soars 6% After Blowout Deliveries, But Analyst Says It’s a $120 Stock (Is He Right?)

Tesla’s stock (TSLA) surged about 5% in early Tuesday trading following its report of second-quarter vehicle deliveries that exceeded Wall Street’s expectations. The company delivered 443,956 vehicles during the quarter, surpassing analysts’ consensus estimate of 439,302 deliveries, according to Bloomberg data.

Tesla also disclosed that it produced approximately 411,000 vehicles and delivered 444,000 vehicles in the second quarter. This total included 422,405 Model 3 and Model Y vehicles, along with 21,551 deliveries of other models.

 

Tesla’s total delivery figure for the second quarter, at 443,956 vehicles, marks an increase from the 386,810 vehicles delivered globally in the first quarter but falls short of the approximately 466,140 vehicles delivered a year ago.

The company has been facing strong competition, particularly from Chinese counterparts, in a challenging EV market. Earlier this year, Tesla initiated plans to reduce more than 10% of its global workforce, interpreted by some analysts as a cost-cutting measure amid tough market conditions.

At Tesla’s recent shareholder meeting, CEO Elon Musk acknowledged that near-term demand and sales would face challenges amidst an industry transition period. Musk described the current environment as challenging, noting that competitors have been scaling back their investments and production in electric vehicles.

Before the delivery numbers were announced on Monday, analysts from Wells Fargo pointed out that Tesla’s gross margin could be affected given the competitive landscape in the EV market.

 

Colin Langan and his team noted that stagnant EV adoption in the US and EU, coupled with intense competition in China, limits immediate opportunities for Tesla to boost its vehicle volumes. Langan’s firm maintains an Underweight rating on Tesla’s stock with a price target of $120.

Tesla does not disclose specific sales figures for the Cybertruck, but recent recalls have hinted at delivery volumes. Last month, Tesla issued its fourth recall for the Cybertruck since its late 2023 release, affecting approximately 11,688 trucks.

Ahead of the delivery report, Tesla’s shares rose over 6% on Monday, driven in part by strong delivery results from Chinese competitors like Li Auto, Nio, and XPeng.

Despite a recent rally of more than 50% from its 52-week low on April 22, Tesla’s stock remains down approximately 10% year-to-date.