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Why Tesla stock soared higher on Tuesday

One analyst thinks Wall Street is underestimating the electric automaker’s earnings per share potential.
The post Why Tesla stock soared higher on Tuesday appeared first on The Motley Fool Australia. –

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

Tesla stock represented by inside of the Tesla factory at work

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

What happened

Shares of electric car and green energy company Tesla (NASDAQ: TSLA) soared on Tuesday. As of 3:42 p.m. EDT, the stock was up by about 7.8%

The stock was likely trading higher due to a combination of the market’s upbeat mood regarding growth stocks and some recent optimistic notes about the company from analysts.

So what

Many tech stocks were trading higher on Tuesday, with the tech-heavy Nasdaq Composite up by 1% as of this writing. And a number of growth stocks like Tesla, however, were up several percentage points or more. Broadly speaking, growth stocks seem to be rebounding from the steep sell-off they experienced in the second half of February and early March.

Meanwhile, Credit Suisse analyst Dan Levy released earnings per share estimates for Tesla’s first quarter that were ahead of the current average analyst forecast for the period. Levy also noted that he believes the company’s vehicle deliveries in 2021 could be higher than expected. He’s forecasting 929,000 deliveries this year, up from about 500,000 in 2020.

This bullish take on Tesla’s business added weight to another analyst’s optimistic remarks Monday.

Now what

Tesla is rapidly building out its production capacity this year for both its vehicles and its battery cells. For now, demand seems to be growing in line with that rapidly increasing production. Investors, however, should watch to see if this remains the case throughout the year.

Management has guided for vehicle deliveries in 2021 to grow by more than 50%.

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

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More reading

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends 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.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

The post Why Tesla stock soared higher on Tuesday appeared first on The Motley Fool Australia.

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

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