Two-day rally boosts Tesla shares, erasing 2024 losses as analysts raise targets on delivery gains
Tesla’s stock experienced a sharp rise, closing at $269.23 on Friday, marking its highest point in more than a year.
This increase follows Tesla’s third-quarter results, which investors and analysts received positively, as reported by CNBC.
Over two days, the stock erased its year-to-date loss and is now up by 8.4 percent in 2024, although it remains behind the Nasdaq’s 23 percent increase.
Piper Sandler analysts were among those boosting their price targets for Tesla after the company’s earnings announcement.
The firm raised its 12-month target from $310 to $315, citing “higher deliveries and higher margins,” while maintaining its buy rating on the stock.
Tesla shares surged 22 percent on Thursday, marking their second-best performance since Tesla’s 2010 IPO.
The surge came after Tesla reported revenue of $25.18bn, which narrowly missed analysts’ $25.37bn expectation but reflected an 8 percent increase from the previous year. Adjusted earnings per share reached 72 cents, outperforming the forecasted 58 cents.
Tesla’s profit margins received a notable boost from $739m in environmental regulatory credits, which JPMorgan Chase analysts labelled a “potentially unsustainable driver” of earnings and cash flow.
Tesla also benefited from $326m in revenue from its Full Self-Driving Supervised (FSD) system.
During the earnings call, CEO Elon Musk projected that vehicle growth may reach 20 to 30 percent next year, attributing this potential to lower-cost vehicles and the “advent of autonomy.”
Analysts surveyed by FactSet expect more modest delivery growth, around 15 percent for 2025. Bernstein analysts noted Musk’s “long history of being overly optimistic about FSD” and commented that “Tesla continues to lag well behind competitors” on robotaxi technology.
Musk also announced that Tesla plans to start production on its new ‘Cybercab,’ a robotaxi featuring butterfly doors and no steering wheel or pedals, by the end of 2026.
Additionally, Tesla intends to conduct driverless ride-hailing in California and Texas next year, using current vehicles that still require a human driver ready to intervene.
As a result of Tesla’s two-day rally, Musk’s net worth has increased by roughly $30bn, reaching about $274bn, according to Forbes. This figure places him more than $60bn ahead of Larry Ellison, the Oracle founder and former Tesla board member.
Despite these gains, Tesla’s stock remains 34 percent below its all-time high from 2021, reflecting a challenging first quarter in 2024, with year-over-year deliveries falling as more competitors enter the EV market.
Chinese companies like BYD, Geely, Li Auto, and Nio have strengthened their positions, and in the US, traditional automakers Ford and General Motors have expanded their EV offerings, though they recently revised some electrification commitments.
