Stocks are rising amid successful year end and positive forecasts, but not all experts share a belief in the success of the company.
On February 4, Tesla’s stock price exceeded $ 900 apiece for the first time, showing growth of 20% for the second day in a row. At the opening of the Nasdaq exchange, shares were worth $ 882.96, at a maximum price rose to $ 940.13 apiece.
As of 20:55 Moscow time, Tesla shares were worth $ 909 apiece, showing an increase of 16%. The company’s capitalization exceeded $ 163 billion.
At the auction on February 3, 2020, Tesla shares rose 20% – this is the largest daily growth since May 9, 2013, when the growth was 24.4% after the first profitable quarter in the history of the company. Since the beginning of 2020, Tesla shares have risen in price by more than 110%.
Why stocks are rising
Electric Vehicle Supply Growth
At the end of January 2020, Tesla reported that in the fourth quarter of 2019, the supply of electric vehicles increased by 23% and amounted to 112 thousand, and by the end of the year reached a record 367 thousand. Thus, the company fulfilled the goal of shipping 360-400 thousand cars, which was set by Tesla CEO Ilon Musk. In 2020, the company plans to supply at least 500 thousand electric vehicles.
The second half of 2019 for Tesla was profitable – $ 143 million in the third quarter and $ 105 million in the fourth quarter. But never before has a company completed a full year with profit, for 2019 the loss amounted to $ 862 million.
Successful partnership with Panasonic and CATL
February 3, 2020, Panasonic announced that its joint production of batteries with Tesla in the fourth quarter of 2019 for the first time made a profit. The company did not disclose the exact figures.
In addition, Chinese electric vehicle battery manufacturer CATL said it has signed a supply agreement with Tesla for a factory in Shanghai.
Positive forecasts of a major shareholder
One of Tesla’s major shareholders, billionaire Ron Baron, said Tesla could reach $ 1 trillion in revenue over ten years in the electric car business alone.
Baron’s Baron Capital company owns almost 1.63 million shares of Tesla or approximately 1%. The investor said that his company is not going to sell any shares of Tesla.
What analysts say
At the same time, analysts began to revise the target price for Tesla shares. On February 3, Argus Research analyst Bill Celesky raised his annual forecast from $ 556 to $ 808 per share with a “buy” recommendation. Before that, he predicted an increase in the value of shares from $ 396 to $ 556 in early January 2020.
Ark Invest Investment Company expects Tesla’s share price to reach between $ 4,000 and $ 7,000 apiece. The price of $ 420 per share makes the company underestimated, according to Ark Invest.
A sharp increase in shares leads to losses among those investors who bet on the fall of Tesla shares. Short positions are open for 18% of its publicly traded shares – this is the largest “short” among US companies, CNBC notes with reference to the analytical company S3 Analytics.
According to S3, only on February 3, holders of short positions lost almost $ 2.5 billion, and since the beginning of 2020, their losses amounted to $ 8.3 billion.
Some Wall Street analysts doubt the continued success of Tesla and fear that rapid growth may indicate a risk of a “bubble” in the stock market.
Morgan Stanley analyst Adam Jonas February 4 gave Tesla shares a “downgraded” rating and valued them at $ 360 apiece. His assessment is based on the forecast that the company will achieve 4 million sales by 2030 with an EBITDA margin of 15%.
Tesla is increasingly being rated as a technology company, rather than as a car maker, Jonas explained.
The analyst noted that 98% of all cars produced in the world are powered by internal combustion engines. At the same time, he added that at the last Super Bowl Cup there were four advertisements of different electric vehicles.