Tesla Inc.’s (TSLA) sales of its Shanghai-made Model 3 vehicles rose 35% in China in June, month-on-month, Reuters reported citing data from the China Passenger Car Association (CPCA).
The U.S. electric carmaker last month sold 14,954 Model 3 vehicles up from 11,095 vehicles in May, and an increase from around 3,635 units in April, CPCA data showed. CPCA uses a different counting method than Tesla’s deliveries.
Overall, China’s passenger car sales in June fell 6.5% year-on-year to 1.68 million units. Pure battery electric vehicle sector sold 67,000 units in June with Tesla accounting for 23% of the market, the CPCA said.
Tesla shares have gained another 24% since the carmaker last week reported second-quarter car deliveries, which exceeded analysts’ expectations. It delivered about 90,650 vehicles during the quarter. This compares with analysts’ estimates for about 74,130 vehicles. It delivered 80,050 units of its new Model Y sport vehicle and Model 3 for the quarter and 10,600 of its Model S/X vehicles.
Despite the recent production disruptions tied to the coronavirus pandemic, shares have this year shot up 232%. So it is not surprising that the $843.53 average analyst price target now implies 39% downside potential for the shares in the coming 12 months. (See Tesla’s stock analysis on TipRanks). The stock dropped 2.2% to $1,358.41 in afternoon trading on Wednesday.
However, for five-star analyst Daniel Ives at Wedbush, the rally has not yet run out of steam. The analyst, who maintained a price target of $1,250 but raised his bull case PT to $2,000 (from $1,500) says he believes that with “demand for Model 3’s ramping stronger than expectations in China heading into the summer timeframe…Tesla’s stock likely has room to run further.”
“The clear standout this quarter is the massive underlying demand coming out of China as we have seen demand surge in China for Model 3’s in this key region,” Ives wrote in a note to investors. “While the stock has been roaring higher, we believe the main fundamental catalyst continues to be the massive China market which is showing clear signs of a spike in demand for Musk & Co. heading into the rest of this year.”
Overall though, the stock has a Hold analyst consensus, which breaks down into 10 Hold ratings and 8 Sell ratings versus 7 Buy ratings.
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