Tesla Up 8% As Quarterly Deliveries Surprise; Wedbush Says Stock Rally Isn’t Over

Tesla Inc. (TSLA) exceeded analysts’ expectations for second-quarter car deliveries lifting its shares by more than 8%.

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The stock rose to $1,212.68 in early afternoon trading after the electric car maker said it delivered about 90,650 vehicles during the quarter. This compares with analysts’ estimates for about 74,130 vehicles. It delivered 80,050 units of its new Model Y sport vehicle and Model 3 for the quarter and 10,600 of its Model S/X vehicles.

“While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels,” Tesla said in a statement.

The company’s Fremont vehicle factory was closed for more than six weeks with production disrupted from the end of March to early May due to local lockdown orders aimed at slowing the spread of the coronavirus pandemic.

Despite the disruptions, shares have this year seen a great run and have now almost tripled in value. So it is not surprising that the $805.85 average analyst price target implies 33% downside potential for the shares in the coming 12 months. (See Tesla’s stock analysis on TipRanks).

For five-star analyst Daniel Ives at Wedbush, the rally has not yet run out of steam. The analyst, who maintained a price target of $1,250 but raised his bull case PT to $2,000 (from $1,500) says the delivery numbers in this COVID-19 lockdown environment are a “jaw dropper and the bulls will run with this as a potential paradigm changer moving ahead”.

“We believe with demand for Model 3’s ramping stronger than expectations in China heading into the summer timeframe, the lockdown easing in the US/Europe, and some potentially “game changing” battery developments on the horizon (Battery Day another key catalyst) that Tesla’s stock likely has room to run further,” Ives wrote in a note to investors. “While the stock has been roaring higher, we believe the main fundamental catalyst continues to be the massive China market which is showing clear signs of a spike in demand for Musk & Co. heading into the rest of this year.”

Overall, the stock has a Hold analyst consensus with 9 Sell ratings and 9 Hold ratings versus 8 Buy ratings.