Tesla Motors Inc stock closed up on Tuesday, and has been quick to make a comeback after the US stock market’s downfall in August. This month so far the stock has lost around 0.22% versus 1.53% for the S&P 500 Index.
Good day for auto firms
Some optimism on Tesla Motors’ stock may have come from the easing concerns over the Chinese stock markets. On Tuesday, Shanghai Stock Exchange gained 2.92%, owing to the announcement from China to do away with the dividend income tax for investors who hold the stock for more than a year. This measure is aimed at boosting investor confidence for long-term investment.
Getting cues from the Chinese market, the US market also rallied with each Dow Jones, S&P 500 Index, and Nasdaq gaining around 2%. Apart from Tesla, other automakers such as GM, Fiat Chrysler, Volkswagen and Daimler also traded up.
The recent drop in the Tesla Motors Inc shares is most often attributed to external factors as the firm’s performance has been on track. Last month the drop in Tesla Motors stock was the result of global market sell-off.
Investors are more or less confident on the firm as it is expected to deliver its first Model X SUV later this month.
Upcoming catalysts for Tesla
Analysts have a sort of mixed opinion on Tesla. Some believe the stock is overvalued while many expect the price to cross $400 mark. In August, Morgan Stanley’s Adam Jonas reiterated a Buy on the firm, and raised the price target to $465 from $280. Jonas noted that the firm will dominate the autonomous car-sharing service for the mass market.
Commenting on the time, when Tesla could come up with such a service, Jonas said, “[W]e’d be surprised if the company did not articulate some form of shared mobility strategy before the time of the Model 3 unveiling in early 2016.”
The analyst noted Tesla and Uber will not be the only players in the segment, and expect other auto firms to also jump in the next 12 to 24 months. Ford and BMW have already unveiled their plans for the self-driving car tech.
Tesla Motors Inc has plan in place for a mass-market Model 3 car. Pre-orders for the car will start March 2016 while the car will go on production in 2017, the firm;s CEO Elon Musk said last week.
On Tuesday, Tesla shares closed up 2.58% at $248.17. Year to date, the stock is up almost 12% while in the last one-year, they are down almost 11%.