Key Takeaways:
Tesla Inc. shares jumped 4% on Monday, extending a rebound fueled by a stronger-than-expected delivery report and robotaxi expansion.
Tesla Inc. shares rose 4% to about $408 in afternoon trading, extending a recovery after the EV maker's second-quarter delivery beat and the expansion of its robotaxi service to Miami.
"The delivery beat and robotaxi expansion are pulling forward estimate revisions ahead of earnings," said Gary Black, managing partner at The Future Fund. Black still called the stock "fully priced" at more than 200 times 2026 earnings.
Tesla delivered 480,126 vehicles globally in the second quarter, up 25% from a year earlier and exceeding sell-side consensus by 18%, according to Morgan Stanley analyst Andrew Percoco. Energy deployments rose 41% to 13.5 gigawatt-hours. The company launched robotaxi service in Miami on July 3, making Florida the third state for autonomous ride-hailing operations after Texas and California.
The rally comes ahead of Tesla's second-quarter earnings on July 22, with analysts raising estimates. Baird maintained an Outperform rating and a $522 price target, while Morningstar lifted its fair value estimate to $450 from $425. Morgan Stanley kept an Equal Weight rating and a $415 target, implying about 6% upside from current levels.
The stock had fallen 7% on Thursday after the delivery report, a move Black attributed partly to profit-taking after a strong first half. He noted that higher gasoline prices — which climbed from $2.98 before the U.S.-Iran conflict to $3.86 over the July 4 weekend — may have driven more vehicle demand than enthusiasm around autonomy.
Tesla's second-quarter performance followed a 6.3% delivery gain in the first quarter, which was the company's second-weakest sales period since 2022. The rebound in deliveries marks the highest auto growth rate since the third quarter of 2023, Percoco said.
The broader market supported the move, with the S&P 500 rising 0.6% and the Nasdaq climbing about 1% as technology stocks recovered from last week's selloff. The U.S. 10-year Treasury yield edged lower, providing additional support for growth-oriented names.
Black said he expects sell-side analysts to raise their second-quarter and fiscal 2026 earnings estimates this week, which could boost price targets. Still, he cautioned that Tesla trades at a price-to-earnings multiple exceeding 200 times 2026 estimates, compared with expected long-term EPS growth of about 35% from 2027 to 2032, implying a 6 times PEG ratio that "continues to suggest TSLA is fully priced."
This article is for informational purposes only and does not constitute investment advice.
