A Tesla owner charges his vehicle in his New Jersey backyard.
Kena Betancur / AFP via Getty Images
Tesla investors are finally catching a break, with the stock rising after a brutal week of declines as Wall Street analysts come to its defense.
Shares were up 3.2% in early Friday trading despite reports that Model Y sales are slipping down the electric-vehicle rankings in China. The S&P 500 and Dow Jones Industrial Average, for comparison, were up 1% and 0.7%, respectively.
Coming into Friday, Tesla shares were down 15% for the week and about 34% below their 52-week high. Concern about developments in China has been part of the problem.
CNBC reported Friday that the Model Y fell to sixth place in China’s April EV sales rankings from third place early in the year. The news had less impact than it might have had, though, because Tesla had reported weak sales numbers for China earlier in the week.
Tesla’s Shanghai facility was closed for a couple of weeks in the first quarter, hurting production and sales of the Model Y.
Baird analyst Ben Kallo wrote in a Friday report that the problems coming out of China are overblown. He noted that while the Chinese government recently announced it would stop buying Tesla vehicles because of concerns over whether the company is collecting data on users, management has said cameras inside its vehicles aren’t turned on in China. The company is setting up a system that will let drivers check what data Tesla is collecting.
He attributed the weak April sales to plant shutdown to the plant shutdown and maintained his Buy rating and target of $736 for the stock price.
Morgan Stanley analyst Adam Jonas said expectations for Chinese sales might have been too high, setting the stock up for its recent fall. Tesla just started making and selling its Model Y in China, so investors have been excited about the growth it could provide.
Jonas noted that investors could become even more concerned about Tesla’s sales in China, but said the recent declines in the stock price are a buying opportunity. He rates the stock at Buy and has a target of $900 for the price.
Tesla stock is actually in a rare place. At about $590, the stock is below the average target among analysts of roughly $617. That doesn’t happen often with Tesla, so it could spell opportunity for investors.
Of course, analysts could also just cut their price targets to reflect recent declines in the shares.
Write to Al Root at [email protected]
