Shares of electric-car company Tesla (NASDAQ: TSLA) rose on Tuesday, gaining as much as 7%. As of 1 p.m. EDT, the stock was up 6%.
The stock’s gain is likely fueled by a number of factors, including analyst commentary, gains for growth stocks on Tuesday, and more.
Morgan Stanley analyst Adam Jonas reiterated an equal-weight rating and a $230 price target on Tuesday. The 12-month price target is notably more than 20% higher where shares are trading today, signaling meaningful upside for the stock.
Tesla’s gain on Tuesday also follows a sharp year-to-date decline for the stock. Shares are down 43% so far — even after today’s gain. Some investors, therefore, may believe shares have been oversold.
Finally, it’s an overall positive day for growth stocks, as many of them recovered by a few percentage points on Tuesday after being beat down amid trade war concerns. Tesla’s rise today could be partly attributable to this market bullishness.
The near-term concern for Tesla investors to keep an eye on will be demand for the company’s vehicles. The electric-car maker forecast vehicle sales to rise 45% to 65% year over year in 2019. While growing Model 3 production suggests supply will be sufficient enough for Tesla to meet this target, it’s unclear whether demand will be robust enough.
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