Tesla Stock (NASDAQ:TSLA)
S&P Global Ratings moved Tesla stock into the investment grade category by upgrading the company’s long-term credit rating to BBB from BB+. This is the first time that Tesla stock has achieved investment-grade status.
The rating agency views Tesla’s (NASDAQ:TSLA) credit profile more favorably because the company continues to demonstrate market leadership in electric vehicles, with solid manufacturing efficiency that supports strong EBITDA margins and sustained positive free operating cash flow. Additionally, the agency cited Tesla’s (NASDAQ:TSLA) ability to demonstrate market leadership in electric vehicles.
“We anticipate that Tesla (NASDAQ:TSLA) will be able to maintain free cash flow to sales of over 10% in 2022 and 2023, which is an increase from our prior upside trigger of 2% and is supported by industry-leading EBITDA margins of approximately 20%. It is an increase from our prior upside trigger of 18% and is significantly higher than our 10% threshold for above-average margins for automakers. This is despite the significant expenditures that have been incurred as a result of ramping up its production facilities in Berlin and Austin, as well as persistent interruptions in the supply chain and increasing commodity prices.”
According to S&P, Tesla stock has mitigated the consequences of the industry upheaval by increasing average selling prices, selling regulatory credits, and reducing manufacturing costs compared to our earlier forecasts.
At 1:30 p.m. Eastern Time, Tesla stock prices had recovered some of their early losses but were still trading at a loss of 0.30%.
Featured Image- Megapixl @ Colour59
Author Shariq Khan 
