Tesla 4Q earnings win: Analyst comments on stock price record, report – Business Insider – Business Insider

• Tesla beat analyst estimates for fourth-quarter profit and revenue Wednesday afternoon, and the subsequent stock spike prolonged the automaker’s strong rally in 2020.
• The company announced its Model Y CUV would reach delivery sooner than expected, and projected it would „comfortably exceed“ 500,000 total deliveries in 2020, a 36% gain from last year’s figure.
• The earnings win saw Tesla shares jump as much as 12% to hit a record-high price of $650.88 per share.
• Here’s what four analysts said about the soaring stock price and fourth-quarter earnings win.
• Watch Tesla trade live here.

Tesla bested analyst estimates with its fourth-quarter report on Wednesday afternoon, prolonging its stock surge through 2020 and easing fears of a continued supply struggle.

The automaker’s stock soared as much as 12% Thursday following the blockbuster report. Tesla beat expectations for both quarterly profit and revenue, and noted its 2020 deliveries would „comfortably exceed“ 500,000 vehicles compared to 2019’s 367,500.

The company also accelerated the rollout of its Model Y CUV, saying a „production ramp“ started in January and deliveries would begin by the end of March.

The earnings win drove Tesla shares to an all-time high of $650.88 per share. The stock has already notched several record highs through the new year, granting a hefty compensation package for CEO Elon Musk and establishing the firm as the highest-valued automaker in the US.

Tesla traded at $640.50 per share as of 3:10 p.m. ET Thursday, up about 55% year-to-date.

Here’s what four analysts have to say about Tesla after its positive fourth-quarter figures and surging stock price.

Piper Sandler: „Tesla’s thriftiness continues to impress“

Foto: sourceTesla

Price target: $729

Rating: Overweight

Tesla’s frugality helped the automaker end the quarter with 6.3 billion in free cash, and its success in strategically deploying capital to boost vehicle deliveries prompted a price target upgrade from Piper Sandler’s analysts.

„Predicting capex is a challenge, but Tesla keeps under-spending our estimates, so we’re cutting our forecast to more closely reflect the company’s actual performance,“ the team wrote. „Tesla’s thriftiness continues to impress.“

The company’s strategic investments are set to push deliveries to a lofty record in 2020, and „demand remains a non-issue“ with several new models set to hit markets in the coming years, the analysts wrote.

Despite exciting launches for the Model Y, Semi, and self-driving software on the horizon, the next event to watch is Tesla’s „battery day,“ they added. Power cells are shaping up to be a limiting factor in the company’s production ramp-up, and any positive updates to battery technology or new suppliers could lift a downward pressure for the automaker.

Wedbush: „The bull party will continue“

Foto: Tesla CEO Elon Musk introduces the Cybertruck.sourceAP Photo/Ringo H.W. Chiu, File

Price target: $710

Rating: Neutral

Noted Tesla bull Dan Ives viewed the company’s latest report as „potentially game-changing,“ as stable profitability and healthy cash flow secured Tesla’s spot as a lasting player in the EV space. The 500,000-deliveries estimate is „conservatively positive,“ Ives said, and the company could deliver as many as 550,000 vehicles in 2020 and support a continued rally for the soaring stock.

„The bull party will continue as the aggressive trajectory of Giga 3 production and demand out of Shanghai look very strong out of the gate,“ the analyst wrote.

Wedbush also updated its long-term bull case for the automaker, noting that Tesla shares could reach $1,000 if it can ramp up production in Shanghai and drive demand in China in the years to come. The firm’s new Tesla price target reflects heightened demand for EVs, and past fears around improving production rates are quickly fading, the note said.

„For Musk, despite all the noise over the last year and balancing a myriad of projects at Tesla (while running SpaceX and launch targets) last night completes a „comeback story for the ages“ from the dark days seen last April,“ the team wrote.

Canaccord Genuity: „The leader of the EV revolution“

Foto: Elon Musk at the unveiling of Tesla’s new RoadstersourceTesla

Price target: $750

Rating:

Canaccord Genuity now stands as Wall Street’s biggest Tesla bull, with their latest price target implying a 16% upside from Thursday’s opening price. Though the new target is based on a lofty 2021 EPS projection of $25.03, the firm believes Tesla’s opportunity in „disrupting the legacy transportation industry“ warrants such rapid profit growth.

The analysts also praised Tesla’s advantage in the battery, echoing other firms in emphasizing the importance of its upcoming battery tech event. The automaker’s „greatest near-term risk“ is its Shanghai factory’s exposure to the coronavirus, the analysts noted. If the outbreak is efficiently contained in the coming weeks, Tesla is on pace to reach numerous records in the new year, Canaccord Genuity added.

„Given the numerous positive data points that were discussed and the cornerstone of of continued profitability and free cash flow generation, we view the company as solidly positioned as the leader of the EV revolution,“ the analysts wrote.

CFRA Research: „Unfavorable at current levels“

Foto: Tesla Inc CEO Elon Musk poses with Tesla China-made Model 3 vehicle owners onstage during a delivery event at its Shanghai factory in China January 7, 2020.sourceREUTERS/Aly Song

Price target: $440

Rating: Sell

Despite the massive earnings beat, not all firms lifted their doubts on Tesla’s future growth. The stock’s current risk/reward scenario is „unfavorable at current levels,“ and risks surrounding the Chinese factory’s ramp-up could quickly pull shares lower, CFRA analyst Garrett Nelson wrote.

Tesla failed to report capex figures related to its new factory in Germany, Nelson said, leaving investors in the dark as to whether the facility reaches regular production as efficiently as the Shanghai factory. The analyst downgraded Tesla stock to „sell“ from „hold,“ and his new price target implies a 32% tumble from its Thursday opening price.

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