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Why Tesla stock jumped on Thursday

The electric-car maker’s shares are now up a total of 38% in October alone.
The post Why Tesla stock jumped on Thursday appeared first on The Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Tesla (NASDAQ: TSLA) jumped on Thursday, rising more than 3% as of 11 a.m. EDT. The stock’s bump higher follows an analyst’s move this week to increase its 12-month price target for the electric-vehicle (EV) maker’s shares to $1,300. 

The growth stock‘s gain on Thursday builds on staggering momentum over the last month. Month to date, the stock is up a whopping 38% as investors digest the company’s strong third-quarter earnings report.

So what

Piper Sandler analyst Alexander Potter reiterated an overweight rating for Tesla stock and set a price target of $1,300 on Thursday, citing the fact that the competition’s attempts to gain momentum in the budding EV market are largely falling flat. In addition, he praised Tesla’s warranty performance, implying that the quality of the automaker’s vehicles is increasing.

An upbeat day for the overall market likely is also helping Tesla stock today. As of this writing, the S&P 500 was up 0.8%.

Now what

Tesla’s sky-high valuation, which gives the stock a price-to-earnings ratio of about 350, means the EV maker will have to follow through with strong performance in the final quarter of the year and going into 2022.

Management has guided for deliveries to rise more than 50% this year, but this view is likely considered conservative by many investors. Growth around 60% (or even higher) is more likely based on the company’s recent vehicle production rates and quarterly deliveries. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock jumped on Thursday appeared first on The Motley Fool Australia.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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