Tesla Just Broke Out and Could Test $888 Next

Jul 21, 2022
EV charging station for electric car in concept of green energy and eco power produced from sustainable source to supply to charger station in order to reduce CO2 emission .

Pay close attention to Tesla (TSLA).

On heavy volume, the EV stock is up about $70 on the day.  All after second quarter earnings came in better than expected.  EPS, for example, came in at $2.27, which was higher than expectations for $1.81.  And while revenues were up 42% year over year, TSLA margins did fall thanks to inflationary pressures, and increased competition.

“In a nutshell, the quarter was better than feared with healthy guidance for 2H by Musk & Co. that look achievable with no margin for error,” wrote analysts Dan Ives and John Katsingris from Wedbush, as quoted by CNBC.  The firm still has a price target of $1,000 on TSLA.

Other firms are just as bullish.

Mizuho, for example, raised its price target to $1,175 from $1,150.  Bank of America raised its price target to $950 from $900.  Canaccord raised its target to $815 from $801.  Cowen raised its target to $733 from $700.  Wells Fargo raised it to $830 from $820. 

Oppenheimer analyst Colin Rusch is still bullish, too.

As noted by, “With Tesla posting largely in-line Q2 manufacturing results in a challenging quarter with upside coming from its non-auto businesses and better-than-expected operating leverage, there were several notable technology and business model takeaways. First, supply chain and manufacturing throughput on its Austin and Berlin facilities appears to be tracking well. Second, 4680 ramp problem-solving appears to be making progress toward acceptable yields. Third, FSD is tracking a full functionality rollout by year-end along with a price increase. Last, he is beginning to see potential for operating margin expansion to 25% given scale-up and OpEx management similar to leading technology platforms.”

In addition, TSLA stock just broke above prior resistance around $792.63.  From here, we’d like to see it refill its bearish gap around $888, near-term.