Tesla Stock Surges 5%

Tesla Stock Surges 5%

Actions of World No. 2 stock of electric vehicles (EV) You’re here (NASDAQ:TSLA) surged 5.2% through 10 a.m. ET Tuesday, despite Bernstein reducing the stock’s price target to $120 per share. Bernstein cited weak demand for Tesla’s electric vehicles as a reason for lowering the price target, reducing projected sales of Tesla cars and maintaining its sales evaluation.

So why is Tesla up despite this news?

Hello, Tesla!

Because Italy.

As The Sun 24 reports that the electric car maker is negotiating with the Italian government to obtain an Italian production site – not to produce electric cars. Tesla wants Italy to be its European home base for building electric trucks and vans. From Italy’s perspective, this would bring a second automaker to the country, joining Stellar, which currently dominates. (Three Chinese companies are also negotiating.)

But why would Tesla – which already has an automobile project in Germany – want to build a new factory? The details aren’t 100% clear, but if Tesla plans to introduce its Electric Semi (the Tesla vehicle pictured in The sunhistory) to Europe, well those might be more expensive to ship overseas from the US to sell in Europe. Creating a local store could make sense.

The newspaper’s mention of a Tesla “van” is also curious. Although Tesla has hinted at the possibility, it has yet to announce a product. This could be a first for Tesla and expand the company’s customer market.

Is Tesla Stock a Buy?

It is too early to say that this Italian news constitutes a new reason to buy Tesla shares. That only injects uncertainty into Wall Street analysts’ predictions, like Bernstein’s, that Tesla stock is set to lose a third of its value this year. This reminds us that CEO Elon Musk can still surprise investors and competitors alike.

With Tesla shares trading at prices last seen in May 2023 and the P/E ratio looking almost “normal” (for any other company) at just 40 times earnings, maybe it’s time to re-examine Tesla.

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Rich Smith holds positions at Stellantis. The Motley Fool holds positions at Tesla and recommends it. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Why Tesla stock just rose 5% was originally published by The Motley Fool

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