Tesla, IBD Stock Of The Day, Nears Buy Point After Long Consolidation
Tesla Inc
TSLA
$ 352.70
$3.86
1.11%
23%
IBD Stock Analysis
- Stock near buy point of 361.30, coming out of year-long consolidation
- Shares dropped 53% during the consolidation, deeper than is desired
- Relative Strength Rating at 94 out of 99, but EPS rank now a weak 25
Composite Rating
75/99
Industry Group Ranking
6/197
Emerging Pattern
Consolidation
* Not real-time data. All data shown was captured at 1:17PM EST on 12/11/2019.
Tesla(
TSLA) is the
IBD Stock Of The Day, as shares climbed Tuesday after a German newspaper reported the company aimed to produce 500,000 electric vehicles a year at its plant in Brandenburg, Germany.
Tesla stock rose 1.1% to close at 352.70 on the
stock market today, the fourth straight day of gains for the electric-car maker.
After a lengthy consolidation, Tesla stock is near a buy point of 361.30, with the buy range going up to 379.36. The
consolidationstarted about one year ago, hitting a bottom at 179.99 in June. That's a drop of 53%, much deeper than a desired decline in the range of 30% to 35%. But Tesla stock fought back and has doubled since then.
Tesla stock has a history of being erratic, with its mercurial Chief Executive Elon Musk frequently drawing attention with bold claims about production and profitability that have been a challenge for analysts to discern.
Tesla Stock: Production In China, Germany
Last month, Tesla announced that a site in Brandenburg was chosen to build Tesla Model 3 and Model Y vehicles. According to a report by Germany-based Bild, Tesla plans to invest about $4.4 billion into the plant. Construction is scheduled to start in 2020 and create 10,000 jobs, according to the report. Tesla declined to comment on the article.
The report comes as Tesla is building trial-production units of the Model 3 at its new factory in Shanghai, China. The facility is already under construction, though Tesla has not yet said when car production will begin. It will be Tesla's first full-scale production plant outside of its Fremont, Calif., operation.
Morgan Stanley's Adam Jonas thinks Tesla could sell 250,000 Model 3 vehicles in China by 2025. But in a bull-case scenario, Jonas ups that to 450,000.
Tesla has a goal to produce 360,000 to 400,000 vehicles this year, an increase of 60% to 80% vs. a year ago.
Analyst Rating On Tesla Stock
In a report on Tesla last week, Jonas
maintained his cautious viewoverall on Tesla. He raised a bullish, high-end estimate on Tesla stock to 500 from 440. That's about 40% above where Tesla stock currently trades.
But Jonas maintained his central price target at 250 on Tesla stock, with a rating of "equal rate."
The market for all-electric vehicles is intensifying, with
General Motors(
GM),
Ford Motor(
F) and
Fiat Chrysler Automotive(
FCAU) moving deeper into the territory.
Last month, Tesla
debuted its futuristic Cybertruckto mixed reviews.
"The radical design will likely be a point of discussion," Baird analyst Ben Kallo said in a note to clients. "But over time we expect impressive features will win over a larger audience."
On Wednesday, auto information provider
Edmundsnamed the Tesla Model 3 its top-rated electric vehicle.
Tesla Shows Unexpected Profit
Tesla stock is up about 39% since the company reported
third-quarter earningson Oct. 23 that showed an unexpected profit, with a slight miss on revenue. Company officials attributed the swing to profitability in Tesla earnings to a reduction in costs.
In a
letter to shareholders, the company said operating expenses are at their lowest level since the company started producing its lower-end Model 3 for mass sales in 2017.
The IBD
Stock Checkup Toolshows that Tesla has an
IBD Composite Ratingof 75 out of a best-possible 99. The rating means Tesla stock currently outperforms 75% of all stocks in terms of the most important fundamental and technical stock-picking criteria
It has a
Relative Strength Ratingof 94 out of 99. The rating tracks market leadership by showing how a stock's price movement over the past 52 weeks measures up against that of the other stocks.
It has a weak
EPS Ratingof 25, which compares quarterly and annual earnings-per-share growth with all other stocks.
How Tesla Rates Among Peers
The company currently holds the No. 4 ranking among its peers in IBD's Auto Manufacturing industry group.
Ferrari(
RACE) is No. 1 in the group, followed by
Toyota Motor(
TM), then Fiat Chrysler.
The group ranks a strong No. 6 among
197 industry groupsin recent performance.
In the stock market, timing is critical. So when you're looking for
stocks to buy or sell, it's important to do the fundamental and technical analysis that identifies lower-risk entry points that also offer solid potential rewards.
Please follow Brian Deagon on Twitter at@IBD_BDeagonfor more on tech stocks, analysis and financial markets.