Why Tesla Stock Bounced Back Today
Regaining its momentum after two days of losses, Tesla (NASDAQ: TSLA) stock jumped 3.5% through 11 a.m. ET on Friday. Curiously, it was a cut to the price target from Credit Suisse that seems to have provided the push that got Tesla moving higher.
As StreetInsider.com reports this morning, an analyst at the Swiss investment bank cut his price target on Tesla from $1,150 to $1,000 to account for a "lower deliveries outlook, the associated margin impact" of those slower deliveries -- and a big hit to profits in consequence. The analyst, Dan Levy, also noted that Tesla will take a bit of a hit from Bitcoin's value falling by more than half since the end of March.
COVID-19 lockdowns in China have hobbled Tesla's ability to produce electric cars at scale in the second quarter. Most analysts are predicting the company will deliver only 280,000 vehicles this quarter, versus the 320,000 units delivered in Q1. Levy thinks the actual deliveries number could be as low as 242,000. And with so many fewer cars being delivered (and paid for) in the quarter, he has decided to cut his predicted profit for Tesla by nearly half -- to just $1.10 per share.
Source Fool.com
