Tesla Defeats the Odds and Outperforms Predictions
Tesla deliveries in the first quarter reached 184,800 vehicles, making a 109% increase in comparison to 2020 and a 2.3% increase from the fourth quarter.
Tesla overruled predictions of a sequential decline. Analysts had estimated an average of 168,000 which is 9% less than what the company sold.
Tesla was able to outperform estimates despite strong emerging EV competitors under a global chip shortage that was weighing on production across the electric vehicles industry.
However, after Tesla’s delivery report, Wedbush analyst Dan Ives upgraded Tesla stocks from neutral, and pushed his price target to 1,000 that is a 5%increase from his initial target. Ives also categorized Tesla as one of the “Best Ideas.”
Dan Ives also believes Tesla will exceed 850,000 deliveries for the year. Ives set a 900,000 a stretch goal for the company, even under a chip shortage challenge. Tesla will be able to overcome various supply chain issues arising in the auto sector.
On another note, Musk tweeted it’s possible to buy a Tesla with Bitcoin. This comes after the company had previously purchased $1.5 billion in Bitcoin back in February.
“This past year was transformative for Tesla,” the company announced in its written remarks. Tesla was able to thrive in the midst of unforeseen global challenges while fighting a pandemic. Despite all of the obstacles, the electric car company rose to the challenge and increased volumes, profitability and cash generation.
Tesla’s Rapid Production
Ives also boosted Tesla’s delivery estimates for the second quarter as well. Model 3 and Model Y are predicted to have 166,000 deliveries. That marks an impressive increase after the 144,000 deliveries in the first quarter.
Ives expects 14,000 deliveries for Model S and X vs. about 13,000 previously.
All of the delivery numbers combined brings us to a total unit estimate that is 12% higher than the first quarter.
Tesla has supported its increase in production with a massive expansion to its manufacturing capabilities. Elon Musk, Technoking of Tesla is aiming to reach a milestone of 20 million electric vehicles a year by 2030. This milestone is more than double the current production of auto-making giants combined. But, Musk believes that it’s possible by rapidly expanding manufacturing capabilities.
Tesla has a leap with its third manufacturing plant under construction near Berlin. The new plant will be dedicated to produce the Model Y.
Tesla is also planning to build a fourth manufacturing plant near Austin, Texas. It will be Tesla’s largest so far with a 2,000-acre land. Texas’s plant will produce the Cybertruck and the Semi Truck in addition to the Model Y and Model 3.
However, Tesla Cybertruck deliveries won’t start until the first quarter of 2022.
Tesla Stocks in Numbers
Tesla’s forecast can be read through the IBD Stock Checkup lens. It gives Tesla stocks an IBD Composite Rating of 94/99. Such a high rating indicates that Tesla stocks are outperforming 94% of stocks in terms of important fundamental and technical stock-picking criteria
Tesla’s Accumulation/Distribution Rating is currently a B. This rating analyzes the changes in price and volume in a stock over the span of 13 weeks of trading. The scale ranges from A, which is a sign of heavy institutional buying, to E which signals heavy selling.
Tesla’s relative strength line has been a rollercoaster so far. It peaked to record highs in late January, then it began trending downward. However, it recently leveled out a bit. The relative line shows a stock’s strength against all other stocks in the S&P 500.
With all the previous indicators, Tesla stock is currently a safe buy. According to MarketSmith chart analysis, Tesla is gracefully backed above the 10 week-line.
Tesla’s 50-day level of support is putting it against a big test. If the company’s stocks can keep retaking that line, it will be the buy signal that aggressive investors are on the lookout for. However, if Tesla shares can hold above that line for just a few more days, then there will be a new base with a buy point of 900.50.