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Tesla Headed for New Record Highs, Market Waits for COVID-19 Impact

Tesla factory.

Electric car manufacturer Tesla is set to launch its first-quarter results on April 29. Analysts are expecting the company to report an adjusted loss of 25 cents per share with sales of $6.2 billion during the first quarter.

Tesla (NASDAQ: TSLA) stock price has been charging up in recent sessions thanks to recent upgrades by Wall Street. Investors can bank on healthy delivery figures in the first quarters and the fact that Tesla’s compact SUV, Model Y, started production in January. However, the near-term demand for big-ticket items is still impacted.

Tesla (TSLA) stock price performance on a daily chart. FinViz data.

Despite the pandemic affecting the global economy severely, Wall Street believes that there is a larger, brighter future for electric vehicles in the world. Since Tesla has emerged as the clear leader in this space, analysts are confident that the company will continue to make a major impact in this sector.

Goldman Sachs expect that the company’s market penetration will increase from 2% in 2019 to 15% in 2030, giving it an edge over its peers and helping it race ahead even as gas prices are at historical lows.

What about COVID-19?

Though Tesla has been riding the high wave for some time, the company has kept mum on the COVID-19 pandemic and its impact on its business. Production shut down at its factories in late March and investors are interested in knowing what the company thinks about its plan going ahead in 2020. Interestingly, Tesla is yet to rescind its guidance of 500,000+ deliveries in Q1.

Analysts polled by FactSet are eyeing a $6.16 billion figure in first-quarter sales. In January, they predicted a figure of $6.6 billion. The EV manufacturer is also expected to post a loss of 25 cents per share. This is a marked decrease from January when analysts predicted 93 cents as adjusted earnings per share.

In March, Tesla noted that it has sufficient liquidity to “navigate an extended period of uncertainty.” However, Ford is expecting a first-quarter loss owing to lower sales. GM is yet to post its preliminary numbers for the quarter.

It appears that analysts are giving more weightage to the future of electric vehicle manufacturing with Tesla, even at testing times when sales of big-ticket items are affected.

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