Wedbush Securities’ top analyst, Dan Ives, has made a significant prediction after Tesla Inc released production and delivery numbers for the second quarter. According to Ives, there is still ample opportunity for Tesla to continue its growth in the market.
During the past week, Tesla announced its remarkable second-quarter delivery figures, surpassing Wall Street’s consensus estimate of 447,000 with a record-breaking 466,000 deliveries. Additionally, Tesla’s production for the quarter reached 479,700 units, reflecting a significant increase.
On Monday, following the release of production and delivery statistics for the second quarter, Tesla stocks surged by 8.4%.
Dan Ives contends that the impressive delivery numbers from Tesla provide clear indications of improved capacity and a healthier macroeconomic environment, as stated in a research note on Sunday. These figures serve as substantial evidence to counter the prevailing narrative of uncertainty and should “put the bears back into hibernation mode,” according to Ives.
According to reports, Dan Ives has given Tesla stocks a “buy equivalent” rating, with an “outperform” recommendation, and set a stock price target of $300.
In the research note issued on Sunday, Ives expressed that the delivery number showcased a significant stride in the right direction and is highly encouraging for optimistic investors. “Tesla continues to play chess while other EV players are playing checkers.”
Aggressive Price Cut: Is it the Right Move?
Over the past few months, Tesla, under the leadership of Elon Musk, has implemented a strategy of aggressive price reductions in key markets worldwide, including China and the USA. While some bear traders have raised concerns about Tesla’s choice to rely on such extensive price cuts in 2023, suggesting potential margin problems, Ives asserts that the recent delivery figures serve as proof that these cuts have already yielded significant benefits and are fueling demand.
While Ives and other bullish supporters of Tesla celebrated on Monday, the bearish analysts were not ready to go into hibernation just yet. Craig Irwin, a senior research analyst at Roth Capital, maintained an $85 price target for Tesla and raised concerns about increasing competition and an inflated valuation.
Irwin expressed to CNBC on Monday that the valuation of Tesla is simply absurd and egregiously overvalued. He further noted that Tesla will face competition from over 100 other electric vehicles (EV) models entering the market, significantly outnumbering Tesla’s four mainline units. According to Irwin, many of these upcoming EV models are expected to achieve remarkable success.
Tesla’s stock price has experienced significant ups and downs over the past year, with a peak of $314.67 on October 25, 2022, and a low of $109.10 on December 27, 2022. As of July 3, 2023, it closed at $261.77, indicating a 16.8% decline compared to the previous year.
Price Reductions and Impact of Broader Market Conditions
Tesla has recently lowered prices for its Model 3 and Model Y vehicles in the United States and other markets. Some analysts view this move as a signal of weakening demand and an attempt to manage excess inventory. Additionally, Tesla provided a $7,500 discount to U.S. customers who took delivery of these models before the end of 2022.
Tesla’s stock price has also been influenced by broader market conditions, including the rise in inflation and interest rates. These factors often have a negative impact on growth stocks that have high valuations and are dependent on future expectations.
