Strong profits boost Tesla bull outlooks

Following what many considered a rough 2022 for Tesla, investors are warming up to the idea of a big 2023 for the automaker, especially after the company’s recent quarterly earnings call. With Tesla’s strong profits heading ending 2022, and new expansions and production plans set to begin this year, some bulls are doubling down on their support for the automaker’s stock.

Tesla’s stock prices rose following the company’s fourth-quarter earnings report, despite continually increasing competition and a number of other barriers, as The New York Times reports. At the time of writing, Tesla’s shares have increased by about 33 percent since the beginning of January, a welcome surprise for shareholders who watched the company drop $685 billion in market value in 2022 for a 65-percent drop-off.

In the fourth quarter, Tesla saw a 59-percent increase in quarterly profit year over year. Additionally, the earnings call showed rising demand for Tesla’s vehicles, despite swirling concerns surrounding the subject in recent months. All in all, the call had a lot of good news for investors.

Still, The New York Times points to a handful of other factors surrounding the company that may present some challenges to its growth. As just a couple of examples, rising interest rates have already been a challenge for the company, and increased competition from legacy automakers could threaten the automaker’s currently dominant market share in the electric vehicle sector.

The publication also points out significant EV sales at more affordable prices coming from Ford, GM, Hyundai and Volkswagen, along with a strong start in the EV sector from China’s BYD. Cybertruck production will also take until 2024 to reach volume production, while EV pickup sellers Ford and Rivian take the early lead with the F-150 Lightning and the R1T.

During the earnings call, however, Tesla also touted its impressive $3.7 billion in profit and $21.3 billion in car sales on the quarter as proof that its strategy is working. Concerns around demand have largely disappeared with the automaker’s sweeping price cuts in recent weeks, which are even putting pressure on other EV automakers.

Tesla bull and Morgan Stanley analyst Adam Jonas called Tesla his top pick amongst all car stocks for 2023, and the company has remained one of the best performers on the S&P 500 so far this year. While it’s impossible to predict what could happen to Tesla’s stock in the coming months and years, especially given the aforementioned risks, recent profits have some shareholders sticking to their long-term bullishness.

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Source: The New York Times