Tesla, Inc. (NASDAQ:TSLA) shares have been seeing a nice upward bounce since bottoming in mid-June. The stock could be in for a rerating by sell-side analysts, Tesla bull Gary Black tweeted Sunday.
Black is the founder of Future Fund, the sponsor of the Future Fund Active ETF (NYSE:FFND), an actively-managed fund, and Tesla, with an 11.83% weighting, is the ETF’s top holding.
What Happened: The fund manager noted that Tesla’s annual shareholder meeting is scheduled for Thursday, in which the proposed 3:1 stock split will likely be approved.
The EV maker’s stock has another catalyst in the form of the Senate vote on the new EV tax credit provisions that are part of the “Inflation Reduction Act of 2022,” Black said. Lawmakers are likely to vote on the bill before they break for the August recess on Friday, he added.
Given sharply lower interest rates and the possibility of upward estimate revisions, Black said Tesla stock price targets may be upwardly revised.
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Benzinga’s Take: Tesla is coming off a weak quarter, which suffered from production disruptions, supply chain constraints, and slowing demand amid an uncertain economic backdrop.
The company has redeemed itself after COVID-linked closures of its Giga Shanghai plant. June deliveries in China hit a record following a weak April and a soft May. CEO Elon Musk said the company can possibly see a record-breaking second half.
All these are pointers toward an outperformance, which could prove salubrious for the stock.
Price Action: Tesla shares closed Friday’s session 5.78% higher at $891.45, according to Benzinga Pro data.