Elon Musk attended the “Exploring New Areas of Innovation: A Dialogue between Mark Reed and Elon Musk” session on the third day of the 2024 Cannes International Creativity Festival held in Cannes, France on June 19, 2024.
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Tesla The stock surged about 19% on Thursday morning after the company reported better-than-expected earnings, and was expected to post its best one-day gain in more than three years.
The company reported revenue of $25.18 billion late Wednesday, slightly below analysts’ expectations of $25.37 billion but up 8% from a year earlier. Tesla reported adjusted earnings of 72 cents per share, above analysts’ average estimate of 58 cents.
“Given how accustomed investors have become to the company’s earnings disparity, we expect Thursday’s surprising earnings growth to drive strong positivity for Tesla shares,” J.P. Morgan analysts wrote in a note. reaction.
Tesla’s third-quarter profit margin benefited from $739 million in auto regulatory credit revenue, which JPMorgan analysts pointed out was a “potentially unsustainable driver” of future cash flow performance.
Automakers are required to receive a certain number of regulatory credits each year and can purchase credits from other companies if they don’t meet the target. Tesla has excess points because it only makes electric vehicles.
Tesla CEO Musk said on Wednesday’s earnings call that his “best guess” is that “automotive growth” will reach 20% to 30% next year, citing “lower vehicle costs” and “the advancement of autonomous driving technology.” Appear”. Analysts polled by FactSet expect deliveries to grow about 15% in 2025.
Morgan Stanley analysts who recommend buying the stock called Musk’s prediction of vehicle delivery growth in 2025 “possible.” Their estimate is 14%.
“This clearly depends on the company’s ability to improve affordability through the launch of cheaper models (next generation), financing offers and improved features,” Morgan Stanley analysts wrote in a note on Thursday.
With Tesla’s gains on Thursday, the stock erased this year’s losses and is now up nearly 2%, but still trails the Nasdaq’s 22% gain.
—CNBC’s Lora Kolodny contributed to this report.
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