Tesla (TSLA) share prices jumped on Monday in response to the company’s positive first-quarter reportings.
According to a report by The Motley Fool, TSLA gains rose as high as 8.4% after the company reported a surprise profit for the first quarter of the year.
Analysts began publishing a more upbeat view for the electric car manufacturer, including Morgan Stanley’s Adam Jonas. Jonas boosted his 12-month price target for TSLA shares from $440 to $680 on Monday, claiming that Tesla could be the “most profitable and fasting growing auto company” in the world, outside of Ferrari.
Jonas continued, saying he believed Tesla had improved its operating leverage and long-term gross profit margin potential. He also claimed the company operated at a lower cost of capital than other auto-manufacturers.
Despite the optimistic outlook, Jonas’s prediction is below TSLA’s current trading price of $760, indicating a pullback ahead.
The Motley Fool report cautions Tesla’s profitability might take a hit moving forward, particularly if its California-based factory remains shut down as a result of the coronavirus. Tesla itself told investors during the first-quarter update that it would refrain from guiding for profitability during the current period, due to COVID-19 uncertainties.
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