"The American electric car leader" may be in trouble, but Tesla still soared overnight, all because of this report

New institution remains optimistic, Tesla's overnight stock price soared.

In the U.S. stock market on Wednesday, Tesla surged by 4.8%, pushing its stock price to a near four-month high, making it the best-performing stock on the S&P 500 that day.

On the news front, Tesla is set to announce its global delivery data for the second quarter next week. Despite low market expectations, investment bank Stifel remains bullish, stating that the new Model 3 and the upcoming refreshed Model Y can boost sales. With technological advantages, the company still has ample room for further growth.

Stifel: Long-term profit expectations have bottomed out

On Tuesday evening local time, Stifel analyst Stephen Gengaro released a report titled "The Future is Closer than We Think," covering Tesla for the first time and giving it a buy rating with a target price of $265, implying a potential upside of about 35% from the latest closing price.

Gengaro believes that despite recent slowdowns in electric vehicle sales, Tesla's momentum will gradually improve with the expansion of the supercharging network, the launch of affordable models, and overall technological advancements.

From a financial and profit perspective, Tesla's long-term profit expectations have bottomed out. Gengaro pointed out that consensus expectations for Tesla's 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) have declined by 41% over the past 12 months, while expectations for earnings before interest and taxes (EBIT) have dropped by 46%. As negative expectations are gradually revised, this could potentially boost the stock price to some extent.

Gengaro is particularly bullish on Tesla's core technological advantage, believing that the company has no competitors in the electric vehicle field:

"Traditional automakers lack the technical knowledge required for electric vehicles, and they are far behind in this electrification game."

"And they don't have a CEO like Musk."

In Gengaro's view, rather than being an electric vehicle company, Tesla is more like a technology company on par with Apple, Amazon, and Microsoft, benefiting from the AI wave and having long-term growth prospects (2025-2027).

U.S. Market Dominance at Risk

It has become an undeniable fact that Tesla's sales have been slowing down this year. With the new quarter's delivery data about to be released, Tesla may even lose its dominance in the U.S. market.

Since the launch of the Model 3 in 2018, Tesla's sales have consistently accounted for over half of the U.S. electric vehicle market share, but this advantage is now being challengedAccording to the latest data from the automotive industry data provider Marklines, as of May, Tesla's sales in the United States were about 618,000 vehicles in the past 12 months, while the total sales of pure electric vehicles from other brands reached about 597,000 vehicles, very close.

Looking at the delivery data from the first quarter, Tesla's sales in the U.S. dropped by 13% year-on-year, while Hyundai and Kia saw a sharp increase of 56% and 86% in sales.

This indicates that the delivery data for the second quarter may not look good either. FactSet data shows that analysts currently expect Tesla's global deliveries in the second quarter to be 436,000 vehicles, a 6.5% decrease from last year's 466,000 vehicles.

Tesla's stock price has fallen by more than 20% so far this year.