Electric vehicle (EV) maker Tesla Inc. (NASDAQ: TSLA) has been on the radar this week, with an ongoing investigation and strong demand flowing in from Tesla China. Shares fell 2.5%, closing at $668.54 on July 13.
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On Monday, July 12, shares had gained 4.4% on news that Tesla’s Model Y Standard Range (SR) witnessed a huge surge in orders in China. The EV is priced at RMB276,000 (about $42,600) including incentives. (See Tesla stock charts on TipRanks)
Numbers from just one Tesla store showed that following the launch, Model Y orders hit more than 10,000 and 5,000 on the first and second day, respectively.
In June, Tesla China sold 11,513 Model Ys and 17,017 Model 3s. Demand for Tesla’s EVs in China demonstrates the attractiveness of its brand.
Tesla also plans on exporting its Model Y vehicles to Europe in the third quarter. Model Y sales numbers in August or September could provide insights as to whether the Model Y has the potential to outsell the Model S, 3, and X combined
On Tuesday, shares took a beating due to an ongoing probe against Tesla’s acquisition of SolarCity completed in 2016. The company’s CEO, Elon Musk, has allegedly been accused of influencing the Board to buy SolarCity for $2.6 billion.
Plaintiffs have stated that Musk did not act in the best interests of the company at the time of making the deal, as he had a stake in both companies involved.
The investigation is expected to go on for about two weeks. Should the judgment go against Musk, he may end up paying a heavy price.
On Tuesday, Goldman Sachs analyst Mark Delaney maintained a Buy rating on the stock with a price target of $860, implying 28.6% upside potential to current levels.
Based on the robust demand for the Model Y coupled with favorable pricing trends, Delaney raised the projected 2021 earnings per share to $5, which is higher than the consensus estimate. He also increased the forecast Q2 earnings number by 10 cents to $0.94 per share.
Nonetheless, Delaney believes Tesla still has to brave “several headwinds” in the quarter, namely chip shortages, high freight costs, rising input prices, and still limited S/X volumes.
The stock has an overall Hold consensus rating based on 10 Buys, 6 Holds, and 7 Sells. The average Tesla price target of $611.95 implies 8.5% downside potential to current levels. Shares have gained 120.4% over the past year.
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