Tesla takes off again: Analysts predict a rebound in the second half of the year and its shares climb 6.4%

The actions of Tesla rise sharply this Monday, even as some important Wall Street analysts suggest stocks have further room to fall after a tough start to the year and a day before key data releases.

Tesla (TSLA)which is navigating a big decline in global demand for electric vehicles, increased competition from China-based rivals and lower profit margins due to a series of price cutswill release its second-quarter delivery figures on Tuesday, July 2.

So, this Monday, Tesla shares climb 6.2%, extending a series of gains that have reached 15% in the last five days17% in the last month. A sort of recovery, since in the first half of the year the negative balance is 15.5%.

The group warned earlier this year that total deliveries in 2024 would be “noticeably lower“by 2023. Last month, Tesla removed a reference to its goal of delivering 20 million vehicles each year by 2030.

A broader strategy shift, described by the CEO Elon Musk as “blindingly obvious“It could also see the automaker focus on developing a fleet of autonomous robotaxis, harnessing the power of its artificial intelligence supercomputer, rather than its traditional car-making roots.

“Price cuts and financing promotions have shown diminishing returns on volume,” Wells Fargo analysts said in a note published Monday. They lowered their 2024 delivery estimate to about 1.55 million units, “[aproximadamente] a 14% year-over-year decrease and [aproximadamente] 13% below the Wall Street consensus.

Tesla is about to embark on a rally

However, Tesla’s projections are improving for the second half of the year, according to Dan Ives of Wedbushwho says the company’s recovery story is just beginning. The analyst includes Tesla stock on the list of key think tanks as second-quarter deliveries approach.

Tesla stock is poised to rally in the second half of this year as things finally start to look up for the electric carmakeraccording to Dan Ives of Wedbush.

Ives, who has praised Tesla’s growth potential for years, said he remained optimistic about the company despite a tepid performance so far in 2024. Shares are down 18% in 2024, a loss largely driven by weak demand for electric vehicles, rising competition in China and drama stemming from Elon Musk’s multiple legal battles, Ives previously said.

But those headwinds are easing, especially as things begin to stabilize in ChinaIves said. Tesla has stopped offering price cuts on its key car models, a possible sign of firmer demand. Tesla’s second-quarter deliveries, which the company is set to announce this week, will likely be disappointing, but that’s likely “the last of the bad news” for the automaker, he said.

Robotaxi drives stocks

Tesla is also about to present its Robotaxi at an event in Augusta fully autonomous car model that Musk has hinted at for months. The launch could represent a major turning point for Tesla stock, Ives said, previously calling the robotaxi a “magic model” for the company.

Those gains could be amplified if Trump is re-elected for a second term, as Trump is “pro-Musk” compared to President Joe Biden, who has “actively ignored” Tesla, Ives said.

Wedbush reiterated its “outperform” rating on the stock and a $275 price target, implying upside of as much as 33% from current levels. “The ‘comeback kids’ story for Musk is starting with Robotaxi Day in August. I think this is a stock that’s going to have a great run in the second half of the year,” Ives said. “I think the stock is telling you … the worst is in the rearview mirror for Musk and Tesla.”

Other analysts are not so sure. Long-term investors and banking analysts have warned that Tesla could have a downside potential of up to 91%. This is due to key problems with the company’s business model.as well as the fact that headwinds to growth could last for years, strategists said. Wells Fargo at the beginning of this year.