An apology from CEO Elon Musk is creating bigger tailwinds
Shares of Tesla Inc (NASDAQ:TSLA) are up 10% in early trading, after the electric car company took its turn in the earnings confessional last night. The upbeat quarterly results and an apology from CEO Elon Musk are fanning the bullish flames, and TSLA stock could be headed for its best day since late 2015.
For the second quarter, Tesla reported an adjusted loss of $3.06 per share, wider than the $2.92 per-share loss analysts were expecting. However, revenue rose 43% year-over-year to $4 billion, the 2018 capital expenses forecast was lower than expected, and the company said it will "grow our production rate further in Q3," aiming for an output of more than 6,000 Model 3s per week, by late August. What's more, Musk apologized for his recent erratic behavior, saying there's "no excuse for bad manners."
The quarterly results were quick to draw attention from analysts, with Evercore ISI and RBC raising their TSLA price targets to $301 and $315, respectively -- though both of these represent discounts to where the stock is expected to open in today's trading. Morgan Stanley and Jefferies, meanwhile, expressed concern about sustainability, and maintained their equivalents of a "hold" rating, while the latter hiked its price target to $195 from $180. Lastly, Oppenheimer upgraded the stock to "outperform" from "perform."
This skepticism just echoes a broader theme among analysts, with almost 63% of those in coverage maintaining a "hold" or worse rating. Plus, the average 12-month price target of $309.76 stands at a discount to the stock's current perch.
Looking at the charts, TSLA stock had been making a beeline lower since its year-to-date peak near $374 back on June 18. More recently, the security bounced near its negative 10% year-to-date return mark late last month, and just notched its highest open since early July.