Tesla is popular among market participants. The longs have been rewarded, and the shorts have been confounded. Over the last 52-weeks, Tesla has appreciated by just under 41%. The S&P 500 is up 6.8% for the same period - a clear outperformance by the EV manufacturer. However, the stock's momentum is waning. The shift in trendlines from green to orange is evidence of this. I.e. the lower gradient is a measurement of the slowdown in price appreciation.
The company will release its Q1 results today after market close. Tesla delivered around 310,000 vehicles for Q1. At the beginning of the period, analysts expected 325,000 deliveries for Q1. However, supply was disrupted due to rising Covid-19 infections that shut down its plant near Shanghai. Analysts have not amended their consensus forecast of $2.27 eps for the quarter. The revenue forecast has also remained unchanged at $17.84bn.
We also note that margins may come under pressure due to higher input costs and the disruption at Tesla's Shanghai plant, which is lower cost relative to its other manufacturing operations. The conference call will also play its part, and analysts will pay close attention to information regarding the Shanghai plant, cost pressures, and anticipated capacity.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.