Tesla (TSLA) shares moved firmly higher Thursday following data from China showing a solid rebound in May sales and exports from the world's biggest car market and a price target boost and upgrade from UBS.
Tesla sold 32,165 China-made cars last month, the China Passenger Car Association (CPCA) said Thursday, up from just 1,152 in April -- the lowest in two years -- when the group's Shanghai gigafactory was closed for 22 days amid the city's strict Covid lockdown.
The Shanghai factory, which re-opened on April 19 and resumed exports on May 11, produced 33,544 cars over the month of May, a 212% increase from the previous month.
Tesla said earlier this spring that current quarter deliveries should be flat when compared to the first three months of the year, even with the multi-week shutdown of its Shanghai gigiafactory -- which made around half of the group's cars last year -- amid China's 'zero Covid' crackdown. The full-year delivery estimate stands at 1.47 million units.
Tesla shares were marked 1.3% higher in early Thursday trading to change hands at $734.66 each.
Tesla also got a boost from UBS, which upgraded the carmaker to 'buy' from 'neutral', with a $1,100 price target, citing its record-breaking order book and the potential impact from new factories in Austin and Berlin.
UBS analyst Patrick Hummel said Tesla's outlook is "stronger than ever before", and while the Shanghai lockdown will likely mean a 12% reduction in 2022 earnings, "we raise EPS for the next 3 years by up to 40% ... to be achieved mostly with already known products & production facilities."
Star fund manager Cathie Wood also said yesterday that her Ark Innovation ETF (ARKK) has added around 50,000 shares of Tesla over the past two weeks following the stock's extended slump linked in part to Elon Musk's pursuit of Twitter (TWTR).
Tesla shares have fallen around 36.6% since Musk made his 9.1% stake in Twitter public on April 4 as investors have counted the cost of both Musk's margin loans, his sale of around $9 billion in Tesla shares and the billionaire's growing leadership portfolio, which includes space exploration group SpaceX, The Boring Company construction company and neurotechnology specialists Neuralink Corp.
