Nasdaq TSLA Tesla

Why Tesla Stock Slipped Today

5 years 2 months ago

What happened Shares of electric car kingpin Tesla (NASDAQ: TSLA) hit a bit of a bump in the road today, falling 1.9% through 12:12 p.m. EDT after scoring seven straight days of improved stock prices previously.

Tesla vs. GM: Who’s Ahead after Biden’s EV Push?

Nasdaq TSLA Tesla

5 years 2 months ago

According to Thursday's Reuters report, U.S. President Joe Biden has signed an executive order that intends to make 50% of all new vehicles sold in the United States electric by 2030, in order to reduce greenhouse gas emissions in the U.S.

Biden’s administration also proposed new vehicle emission standards aimed at reducing pollution through 2026, which would start with a rise in stringency of 10% in 2023.

Wedbush analyst Daniel Ives viewed the announcement as “part of a broader endeavor under the Biden Administration aimed at accelerating the shift to EVs and ultimately compete with China in this EV arms race.”

Let us compare two companies, Tesla and General Motors, using the TipRanks Stock Comparison tool, and see how Wall Street analysts feel about these stocks.

Tesla (TSLA)

Tesla has been a frontrunner when it comes to EVs. This year, the company has produced 386,759 of them so far and delivered 386,181 vehicles through Q2. Tesla had a record-breaking quarter in Q2 as its quarterly net income surpassed $1 billion for the first time in its history.

Tesla’s Q2 results beat Street estimates across the board. Revenue surged 98% year-over-year to reach $11.96 billion, ahead of the consensus estimate by $560 million. Non-GAAP EPS of $1.45 came in $0.47 above the Street’s forecast. (See Tesla stock charts on TipRanks)

Following the Q2 results, Evercore ISI analyst Chris McNally assigned a Hold rating and a price target of $650 (7.5% downside) on the stock. The analyst viewed TSLA’s automotive gross margin at 28.4% as the "best auto GM ever” and was of the opinion that the company’s “margins are moving in the right direction.”

McNally also said that with TSLA’s revenues likely to scale up in the coming years, which "should drive an industry leading high-teens margin business (before any help from FSD [full self-driving] software potential).”

More importantly, the analyst viewed the Biden administration’s EV/infrastructure bill as the “best near-term catalyst for TSLA.” When the Evercore report was published, Biden’s EV policy was still in the works.

According to Reuters, Biden “has called for $174 billion in government spending to boost EVs, including $100 billion in consumer incentives.”

While there is no clarity regarding the tax credit incentives for EV makers, McNally expects that if TSLA’s “exhausted 200k tax credit incentive cap is lifted to 600-800k, TSLA could benefit from an extra $7.5k of pricing vs consumer elasticity in the U.S. (roughly 1.5-2x years of aided demand by our U.S. volume forecast of ~350k in ’22).”

Furthermore, Wedbush analyst Daniel Ives is believes after yesterday’s announcement that pure-play EV makers could be poised to “capitalize on a Biden driven green tidal wave domestically with our expectations that the tax credits and incentives around EVs will ramp significantly in the coming years.”

Ives projects that over the next 10 years, the EV total addressable market (TAM) could be worth $5 trillion.

Turning to the rest of the Street, consensus is that Tesla is a Moderate Buy, based on 12 Buys, seven Holds, and five Sells. The average Tesla price target of $724.43 implies an approximately 2.8% upside potential from current levels.

General Motors (GM)

General Motors is another automaker giving a big push to EVs. In June this year, the company unveiled a plan to increase its EVs and autonomous vehicles (AVs) investment to $35 billion from 2020-25. This would be a rise of 75% from its initial commitment announced before the pandemic.

GM’s EV push would include increasing the Ultium battery cell production in the U.S. and the commercialization of Ultium batteries and Hydrotec fuel cells made in the U.S., the company said.

GM reported strong Q2 results recently despite chip shortage issues. The company posted revenues of $34.2 billion compared to revenues of $16.8 billion in the same quarter a year back. Analysts were expecting revenues of $29.11 billion.

Adjusted EPS came in at $1.97, surpassing the Street's estimate of $1.34. The company had recorded a loss of $0.50 per share in the second quarter of 2020.

When it comes to its outlook for fiscal year 2021, GM expects adjusted diluted EPS to come in between $5.40-6.40, while net income is projected to range between $7.7 billion and $9.2 billion.

Interestingly, Barra’s letter to shareholders talked about its EV strategy and said that GM intends to develop a “full EV portfolio that doesn’t depend on partial solutions like hybrids and 'electrified' ICE vehicles.”

By 2025, GM expects to launch more than 30 EV models in North America and China. Furthermore, the company anticipates selling more than 1 million EVs on a global basis by 2025. (See General Motors stock charts on TipRanks)

Indeed, Ives is also bullish about GM’s EV push and has a Buy rating with a price target of $85 (54.3% upside) on the stock.

Ives commented, “With Barra & Co. developing game-changing battery technology under the Ultium Platform, GM is in a great position to take advantage of a $5 trillion EV market emerging over the next decade.”

Furthermore, the analyst believes that by using the Ultium battery cell technology, GM could very well usurp market share “against pure-play EVs in all aspects of the industry.”

What’s more, Ives is of the opinion that GM has a potential “gold mine” in the form of the software and services business required for EVs that could very well bring in “$20 billion to $30 billion of incremental services and software we see over the next 5-7 years.”

Turning to the rest of the Street, consensus is that GM is a Strong Buy, based on 16 unanimous Buys. The average General Motors price target of $74.06 implies an approximately 34.5% upside potential from current levels.

Bottom Line

Nasdaq TSLA Tesla

5 years 2 months ago

5 EV Stocks with Bullish Outlooks

Nasdaq TSLA Tesla

5 years 2 months ago

Electric Vehicles' (EV) popularity among consumers and investors suggests that the EV revolution is finally here, after years of wait and hype. Their growing sales, positive impact on the environment (reduction of carbon emission), favorable policies (government grants and subsidies to promote EV), and growing infrastructure (increase in public charging stations) indicate that electric vehicles are not far from becoming mainstream.

So using the TipRanks stock comparison tool, let’s compare five electric vehicles stocks and see how Wall Street analysts feel about these stocks.

Tesla (TSLA)

Let’s begin with Tesla, which is synonymous with EV. Elon Musk’s Tesla holds the lion’s share of the market, despite the growing number of competitors. The EV pioneer continues to deliver robust financial numbers (read more: Tesla Is Firing on All Cylinders; Analyst Says ‘Buy’), backed by stellar demand, higher production and deliveries, and efforts to reduce costs.

Thanks to its back-to-back strong quarterly performances and solid demand, Piper Sandler analyst Alexander Potter reiterated a Buy rating on Tesla stock with a price target of $1,200 (68.8% upside potential).

In addition to Potter, most of the analysts have a bullish view of TSLA stock. Tesla’s Moderate Buy consensus rating is based on 12 Buys, 7 Holds, and 4 Sells. TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Tesla is currently Positive, with hedge fund managers increasing their holdings by 229.1K shares in the last quarter. Meanwhile, with over 138% growth in one year, the average Tesla price target of $746.91 implies 5.1% upside potential to current levels.

Nio (NIO)

Nio is a Chinese premium EV maker. The company recently announced delivery numbers for July 2021. Nio said that it delivered 7,931 vehicles in July, implying year-over-year growth of 124.5%. Furthermore, its cumulative deliveries of vehicles, including the ES8 (six-seater or seven-seater flagship SUV), ES6 (five-seater high-performance SUV), and EC6 (five-seater premium coupe SUV) reached 125,528 as of July 31.

While Nio’s delivery growth rate in July significantly lagged peers (read more: NIO July Deliveries Jump 124.5%; Shares Gain), Wall Street maintains a bullish outlook on the stock. On TipRanks, Nio has received 6 positive analyst reviews for a unanimous Strong Buy consensus rating. Furthermore, hedge fund managers have increased their holdings by 54.0K shares in three months.

Nio, whose stock has surged over 231% in one year, is scheduled to announce its Q2 financial numbers on August 11. The average NIO price target of $64.50 implies 43.1% upside potential to current levels.

Li Auto (LI)

Li Auto is a China-based company that designs and manufactures premium EVs. The company recently announced robust delivery numbers for July 2021. Li Auto delivered 8,589 vehicles in July and crossed the 8K delivery mark for the first time. Moreover, the delivery numbers reflect year-over-year growth of over 251%.

Following the announcement, analyst Ming-Hsun Lee of Bank of America Securities reiterated his Buy rating on the stock, with a price target of $39 (19.3% upside potential).

In addition to Lee, the rest of the street is also bullish on the stock. Its Strong Buy consensus rating is based on 6 unanimous Buys. Li Auto stock has almost doubled in one year. However, the average Li Auto price target of $44.52 implies 36.2% upside potential to current levels.

Blink Charging Co (BLNK)

Blink Charging provides charging equipment and services for EVs. Thanks to the production ramp, record EV sales, and solid jump in company-owned charging stations, Blink Charging stock has increased approximately 223% in one year. (See Blink Charging stock charts on TipRanks)

The company contracted, sold, or deployed 1,597 commercial and residential EV charging stations in Q1. Meanwhile, its top-line increased by 72% year-over-year, reflecting increased demand and growth in its charging stations network. Notably, Blink Charging’s “owner/operator” business model provides a long-term recurring revenue stream with growing EV utilization. (Read more: Will Blink Charging Continue to Charge Ahead?)

On TipRanks, BLNK has a Moderate Buy rating, based on 2 Buys and 1 Hold. The average Blink Charging price target of $38.00 implies approximately 11.3% upside potential to current levels.

Workhorse Group (WKHS)

Shares of the electric truck manufacturer Workhorse Group have gotten a fair amount of beating, and are down over 47% this year. The company’s problems were exacerbated when the United States Postal Service (USPS) awarded a 10-year multi-billion contract to Oshkosh (OSK) instead of Workhorse to modernize its aging delivery vehicle fleet. (See Workhorse Group stock charts on TipRanks)