Tesla stock (NASDAQ:TSLA) experienced a 4.5% surge on Monday, breaking free from a six-day losing streak. This upward movement came as Baird Equity Research, a brokerage firm, designated Tesla’s stock as one of its “top picks.”
Baird Equity Research emphasized that the upcoming narrative for the latter half of the year would be influenced by price reductions and their potential impact on margins. However, the brokerage also identified several other factors that could act as catalysts for the stock’s performance. These include the imminent launch of the Cybertruck, the broader adoption of Full Self-Driving capabilities, and the company’s expansion into new markets.
Despite facing a margin squeeze and anticipating the adoption of its autonomous driving software, Tesla’s shares have already witnessed an impressive 85% increase in value throughout this year. Baird acknowledged that pessimistic investors might raise concerns about reduced production figures. Nonetheless, Baird maintained that Tesla remains on track to meet its projected target of manufacturing 1.8 million vehicles in the current year.
Earlier in the year, Tesla ignited a price competition and recently implemented price cuts for three vehicle models in China. Moreover, on August 14, the company introduced a more affordable version of its Model S sedan and Model X SUV. This strategic move is aimed at stimulating demand and securing a larger market share.
Comparatively, Tesla, as the world’s most valuable automaker, possesses a forward price-to-earnings multiple of 50.15. This figure is notably higher than Apple’s (NASDAQ:AAPL) multiple of 26.58 and Ford Motor’s (NYSE:F) multiple of 6.14. This valuation indicates Tesla’s higher premium in the market.
Baird Equity Research also highlighted an improvement in sentiment surrounding the stock of Rivian Automotive (NASDAQ:RIVN), an electric pickup truck manufacturer. The brokerage further noted that cost efficiencies are becoming evident as Rivian moves to internalize the production of crucial components.
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Author Faith Yakubu 
