Tesla (NASDAQ: TSLA) stock jumped during intraday trading on Monday after a major Wall Street brokerage added the company to its watch list ahead of its quarterly production and delivery report scheduled for Tuesday.
The electric vehicle giant is grappling with challenges including a softening demand and heightened competition from Chinese rivals like BYD. In response, Tesla has implemented price cuts on select models while placing strategic bets on autonomous driving technologies and future robotaxi services to bolster its growth prospects.
On Monday, Wells Fargo added Tesla to its “Tactical Ideas” list, a quarterly collection of stocks believed to have substantial near-term upside. Despite this inclusion, the brokerage maintained an “underweight” rating on Tesla.
Lead analyst Colin M. Langan highlighted the company’s limited options to boost volumes outside of pricing adjustments and model refreshes. He noted that previous price cuts and promotions have had a “diminished” effect on sales.
Analysts forecast a 6% decline in Tesla’s vehicle deliveries for the April to June period compared to the same quarter last year, based on estimates from LSEG.
Earlier this year, Tesla indicated expectations of “notably lower” delivery growth for 2024, and in its latest annual impact report, revised down its goal of achieving 20 million vehicle deliveries annually by 2030.
Despite these headwinds, about 40% of analysts maintain a “buy” or higher rating on Tesla, with another 40% recommending a “hold”. The median target price stands at $180.
Tesla stock has faced pressure in the first half of the year, dropping 20.4% compared to a 14.5% increase in the S&P 500 index.
Tesla (NASDAQ: TSLA) Stock Price Action
On Monday, TSLA stock surged 6.05%, closing at $209.86, marking a 14.94% increase for the week. The trading volume was 135,691,392 shares, significantly higher than the average daily volume of 89.07 million.
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