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The most important automobile makers on the planet are nonetheless chasing
It’s a little bit like Wall Street chasing Tesla stock.
After Tesla (ticker: TSLA) reported better-than-expected second-quarter numbers, Wall Street yawned, primarily saying the numbers have been good, not nice. Plaudits rained down, nonetheless, from an uncommon place: Germany.
Dr. Ferdinand Dudenhoeffer, director of the Heart for Automotive Analysis in Duisburg, sang Tesla’s praises in a LinkedIn put up written in German.
“While almost the entire [car business] sinks into losses in Q2, Tesla makes $327 million in profits in the operating business,” he wrote, in keeping with a Google Translate translation of the put up. “Classic car manufacturers have to get faster.”
That’s excessive reward from the chief of one of many largest automobile producers on the globe. Volkswagen has lofty electrical automobile ambitions, too. It desires to promote 1.5 million electrical vehicles by 2025. Volkswagen delivered greater than 140,000 electrical autos in 2019. Tesla delivered greater than 367,000.
Volkswagen believes the pandemic has truly made the EV transition inevitable as a result of cleaner air and charging at residence will develop into extra necessary sooner or later.
The standard, gasoline-powered, auto trade seems to be lagging behind Tesla. So is Wall Street. Tesla shares are up about 230% 12 months up to now, much better than comparable returns of the
Dow Jones Industrial Common.
However solely 11 out of 36 analysts rated shares Purchase at the start of the 12 months. The typical Purchase score ratio for stocks within the Dow is 55%.
Tesla picked up a brand new Purchase score Friday. Argus analyst Invoice Selesky upgraded shares, placing a brand new goal price of $1,888 for the stock. His goal price in February, the final quantity obtainable, was $808.
“We expect Tesla to continue to improve performance and to benefit from its unrivaled brand reputation in the electric vehicle industry,” wrote Selesky in a Thursday analysis report. “Despite the stock’s strong recent run-up and high PE multiples, we see further upside based on the company’s improving production outlook and accelerating demand for Tesla vehicles.”
Selesky is now an analyst outlier. Solely six of 36 analysts overlaying Tesla stock, in keeping with Bloomberg, price shares the equal of Purchase. Solely seven out of 36 have price targets above the place Tesla stock closed Thursday, at $1,513.07.
Regardless of the improve, Tesla shares look to be taking one other breather. The stock was down 8% in Friday morning buying and selling after falling 5% Thursday following the corporate’s earnings report. Tesla shares are nonetheless up about 45% over the previous month.
Write to Al Root at [email protected]