Tesla Inc.’s record quarter. earned some praise from investors, but the stock fell Tuesday on a mix of concerns about the near-term outlook for the Silicon Valley electric car maker and less appetite for tech and tech-related names.
late Monday reported profits of more than $1 billion and sales that exceeded expectations, but also delayed the launch of its commercial truck, the Semi, and said the chip shortage continued to curb production.
The stock fell more than 3% in afternoon trading, the third consecutive time the stock traded lower on the first day of trading after profit. That further eroded Tesla’s performance this year, dropping 10%. That contrasts with gains of about 17% for the S&P 500 index SPX,
in the same period.
Tesla reported “strong” margins for the April-June period, but it was a “noisy neighborhood,” Jeffrey Osborne told Cowen in a note Tuesday. In addition, guidelines for 2021 “and comments about the next one remain vague,” he said, maintaining his equivalent of a hold rating on Tesla stock.
The news that Chief Executive Elon Musk is unlikely to be on Tesla’s future earnings calls was “strange,” Osborne said, adding that during late Monday’s call, Musk answered just 16 minutes of questions from Wall Street analysts and the spent most of the hour answering phone calls. “Retail and Institutional Investor Softballs.”
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Deutsche Bank’s Emmanuel Rosner, who has a buy recommendation for Tesla, said the “particularly strong” results were even more impressive, as Tesla only saw a small benefit from “big” price increases in the US for some of its vehicles late in the month. the quarter, “indicates additional margin upside in 2H.”
“In the medium term, we continue to believe in Tesla’s impressive trajectory for its battery
technology, capacity and, above all, costs, can make the world shift to
electric vehicles and significantly extend Tesla’s lead in electric vehicles,” said Rosner.
John Murphy with B. of A. Securities took a more cautious note. Despite the beat, “the competition is fierce and heated,” he said. “The work environment of (Tesla) is shifting from that of a vacuum to an increasingly crowded space.”
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The quarterly pace was “helped greatly by positive price dynamics and good execution,” with Murphy raising his share price target from $750 to $800, up about 26% from Tuesday’s prices. He maintained the neutral rating of B. or A. for the stock.
RBC Capital’s Joseph Spak also raised his price target for Tesla stock, from $718 to $745, and maintained the stock’s equivalent hold rating. Spak also praised the EV maker’s margins, but emphasized his concerns about the new battery size.