Investor's Corner
Tesla shares surge after Model 3 production update and record deliveries
Tesla’s stocks (NASDAQ: TSLA) are bouncing back after the company released its first quarter production and delivery report, which listed a 40% increase in production from Q4 2017. Tesla also announced that the rate of Model 3 production during the last seven days of March hit 2,020 a week — a fourfold increase over the past quarter.
Deliveries hit new levels as well, with Tesla delivering 29,980 vehicles in total during the first quarter. Among this number, 11,730 were Model S, 10,070 were Model X, and 8,180 were Model 3. By the end of the first quarter, 2,040 Model 3 and 4,060 Model S and X were in transit to customers.
Tesla’s first quarter report affirmed the company’s target of producing 5,000 Model 3 a week by the end of Q2. The California-based electric car maker and energy company also announced that is not requiring an equity or debt raise this year, apart from standard credit lines.
Overall, signs of recovery from Tesla’s stocks were evident during pre-hours trading on Tuesday. Before markets opened, Tesla’s shares rose 6.5% to $268.49.
Tesla’s surge on Tuesday was foreshadowed by several analysts on Monday. Even amidst Tesla’s plunge yesterday, global investment banking firm Jefferies LLC upgraded $TSLA to Hold (PT $250), according to a tweet from CNBC journalist Phil LeBeau. According to Jefferies, there is a “high probability that management and the (Tesla) Board will take more drastic action on guidance and funding to restore credibility” after the company releases its Q1 2018 production numbers.
Jefferies upgrades $TSLA to hold (PT $250) saying after Tesla posts Q1 Production #'s there is "high probability that management and the Board will take more drastic action on guidance and funding to restore credibility."
— Phil LeBeau (@Lebeaucarnews) April 2, 2018
Baird analyst Ben Kallo also maintained his Outperform rating on Tesla stocks. According to the analyst, Tesla might be able to exceed the lowered expectations for the past quarter.
“While it seems a perfect storm is weighing on the shares, we are buyers into pressure as Model 3 production ramps. We like the set-up headed into Q1 deliveries as we believe sentiment is overly negative, and think Tesla may be able to exceed lower expectations,” Kallo wrote.
Consumer Edge Research Senior Analyst Jamie Albertine also expressed his optimistic expectations for the Elon Musk-led company. In a statement to CNBC News, Albertine stated that if Tesla can make progress with the production ramp-up of the Model 3, the company might have “a very good year” overall.
“This is the most highly contested, I guess, debate of any company that I cover in the auto industry. It’s one of the most highly-debated technology stocks out there. Shorts are, they’re well aware that there is this catalyst coming that might actually be positive. So it’s no surprise that all this negative news is sort of swarming ahead of that potential catalyst. And when you look at it, the Model 3 determines their cash need, period.
“So if they’re on track, even 2,500 units per week within the next few weeks or months still puts them relatively close to their initial guide and well on the way of being cash flow sufficient by means of the Model 3. This reduces the need for them to go back to the market… The story really hinges on the Model 3. That will really cure a lot of these cash questions, and I think they’re gonna have a very good year.”
Tesla’s milestone of producing 2,020 Model 3 in a week was the result of the company’s efforts to ramp-up production during the quarter. As we noted in a previous report, Tesla temporarily shut down the Model 3 line back in February to address bottlenecks and improve its automation systems. A limited number of workers from the Model S and Model X lines were also given the opportunity to help out the Model 3 line during the final week of March.
Tesla shares are currently bouncing back on Tuesday, trading up 4.27% to $263.32 per share as of writing.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
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