EV’s giant Tesla shares are debuting ahead of earnings

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Stock in pioneering electric vehicles

Tesla

closed Monday above $ 700 for the first time in about a month. Shares are back on Tuesday as investors expect first-quarter earnings to mature in late April.

Shares of Tesla (ticker: TSLA) rose more than 5% during Tuesday’s trading to nearly $ 740 per share. He

Dow Jones industrial average

i

S&P 500,

by comparison, they are flat.

Shares peaked at $ 900 in late January, but have since fallen. Tesla shares have struggled to top $ 700 as U.S. interest rates began to rise. The yield on the 10-year Treasury bond increased by about 0.5% from the end of January to the end of March.

This move may not seem like much, but it hurts Tesla’s actions in two ways. Tesla is a high-growth company and higher rates make financing growth more expensive. In addition, growing companies generate most of their cash flow in the future. The current value of these future cash is worth less, relatively speaking, when investors can get higher returns on their money now.

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But Treasury performance was not the only factor affecting the shares. Tesla lost fourth-quarter earnings estimates, disappointing the street and investors. Tesla was earning about 80 cents per share and the analyst was looking for more than $ 1. Losses in the first quarter produced a streak of five consecutive big quarterly “beats” by the company.

However, Credit Suisse analyst Dan Levy sees another beat when it comes to first-quarter numbers. It is above the consensus estimate, forecasting first-quarter earnings per share of 85 cents, while the rest of the street expects EPS of about 73 cents.

When the numbers come out on April 26, Levy wants to see a good pace, strong delivery orientation, and advances in all of Tesla’s new capacity around the world.

Levy still values ​​Tesla shares in Hold and is priced at $ 800.

Overall, about 40% of analysts cover Tesla stock-type shares in Buy. The average purchase score of S&P 500 shares is approximately 55%. But Tesla is often a controversial stock and 40% is a large number of Tesla ratings. A year ago, about 25% of analysts valued buying stocks.

The gains of the last two days leave Tesla’s stocks around 5% so far.

Write to Al Root at [email protected]