Tesla Shares Surge Ahead of Anticipated Delivery Report

Tesla (TSLA) shares experienced a significant surge on Monday, buoyed by optimism surrounding the electric vehicle (EV) maker’s upcoming second-quarter delivery report.

According to analysts at Wedbush Securities, led by Dan Ives, there is a positive outlook for Tesla with a potential turnaround in Chinese demand. The analysts noted a ‘mini rebound’ in China during the second quarter, which is expected to contribute to Tesla achieving close to 435,000 deliveries for the period.

Expected delivery figures from Visible Alpha stand at just under 439,000 units, following Tesla’s previous report of nearly 387,000 deliveries in the first quarter.

By the close of trading on Monday, Tesla’s shares had soared by 6.1% to reach $209.86, making it the top performer on the S&P 500. Despite this increase, the stock remains down approximately 15% since the beginning of the year.

The Wedbush analysts also pointed out an upcoming milestone for Tesla, slated for August 8, where the automaker is anticipated to unveil a driverless taxi network. This move is seen as a significant catalyst for Tesla, along with the rollout of its ‘Full Self-Driving’ feature, in its quest to reclaim a market value of $1 trillion.

Despite the positive news for Tesla, other players in the EV sector in China including Nio, Li Auto, and XPeng also reported strong delivery figures on Monday, with all three companies showing impressive gains in their stock prices.

Wells Fargo recently included Tesla in its ‘Tactical Ideas’ list, indicating potential upside in the near term, although it maintained an ‘underweight’ rating on the stock. The brokerage raised concerns about Tesla’s declining demand for EVs and increased competition from Chinese rivals like BYD.

Analysts estimate a 6% decrease in Tesla’s vehicle deliveries for the second quarter compared to the same period last year. The company had earlier expressed expectations for lower delivery growth in 2021 and has acknowledged challenges in scaling up to its target of 20 million annual deliveries by 2030, as stated in its latest annual impact report.

Despite a challenging start to the year, with Tesla’s stock dropping 20.4% in the first half of 2021, roughly 40% of analysts maintain a ‘buy’ or higher rating on the company. With a median target price of $180, Tesla continues to draw attention in the market.