Benzinga - by Piero Cingari, Benzinga Staff Writer.
Shares of Tesla Inc. (NASDAQ:TSLA) experienced a remarkable 12% increase on Wednesday, marking the strongest session for the electric vehicle (EV) maker since January 2022.
This surge occurred despite the company's Q1 2024 earnings falling short of Wall Street expectations in both earnings and revenue. Investors were seemingly encouraged by Tesla’s commitment to launching more affordable models, aiming to broaden its market reach and potentially boost future revenues.
Adding to the positive sentiment, Tesla received an important endorsement from Bank of America, which upgraded its rating on the stock from Neutral to Buy. Analyst John Murphy highlighted Tesla's ability to address recent challenges effectively.
He noted that although the company faced slower volume growth, lower prices may offer more demand incentives, and while margins are expected to be hit, cost-saving efforts have led to better-than-expected results.
Read also: 8 Tesla Analysts Size Up Next-Gen Vehicles, FSD, AI And More: ‘Potential To Be A Transformational Technology Company, Deliver Outsized Returns’
Additionally, Murphy underscored several positive catalysts poised to enhance Tesla’s market position:
From a technical perspective, Tesla has shown a robust recovery from oversold conditions, as implied by the relative strength index (RSI) before its earnings release.
The stock is currently trading 9% below its 50-day moving average at $176, which might act as a near-term target for investors betting on a trend reversal.
A significant level to watch is $207—the price at which Tesla closed before experiencing a 12% drop following the Q4 2023 earnings report.
Reaching this threshold would mark a 50% increase from April’s lows. However, achieving this level depends heavily on greater clarity and positive developments regarding new model launches, the Robotaxi venture, and overall market sentiment moving forward.
However, stronger competition in the EV sector, delays or setbacks in Tesla’s new business lines, or a broader shift in risk sentiment could maintain bearish pressures on the stock.
Wall Street analysts have set an average price target of $185 for Tesla, with predictions ranging from a high of $310 to a low of $68.
Now read: Cashing In On Tesla’s Post-Earnings Bounce–Ben Graham’s “The Intelligent Investor” Is No Guide Here
Image generated using artificial intelligence via Midjourney.
Latest Ratings for TSLA
| Feb 2022 | Daiwa Capital | Upgrades | Neutral | Outperform |
| Feb 2022 | Piper Sandler | Maintains | Overweight | |
| Jan 2022 | Credit Suisse | Upgrades | Neutral | Outperform |
View the Latest Analyst Ratings
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