tesla (TSLA) is scheduled to hold its investor day next week, with CEO Elon Musk teasing a reveal of “Master Plan 3” details. Following its previous pattern leading up to the event, Tesla shares are on track for their first weekly slide after a sharp six-week rally.
x
Tesla shares have nearly doubled from the January 6 bear market low of 101.81, following a historical pattern of TSLA shares running ahead of similar announcements. In 2016, Tesla’s stock was up 22% for a month before Musk’s second “Master Plan” announcement on July 20, 2016.
“While the sample is relatively small, TSLA has, perhaps surprisingly, underperformed in the week before (by 200bp) and the week after (by 600bp) investor events over the last three years,” Bernstein analyst Toni Sacconaghi wrote on Wednesday.
“All eyes are on TSLA’s next investor day on March 1 and we note that TSLA shares have tended to rally ahead of such events in the past,” CFRA analyst Garrett Nelson added recently.
Tesla shares were down around 4% in market trading on Friday. TSLA shares advanced 0.6% to 202.07 on Thursday. The shares have now gained around 90% since January 6. Tesla shares appear to be forming some type of handle. If Tesla shares consolidate until the investor day event on Wednesday, a breakout would likely imply breaking above the 200-day moving average.
Master Plan Number 3
Tesla’s first Master Plan, revealed in August 2006, laid out the company’s goal of building a wide range of electric vehicles. About 10 years later, Musk revealed his second “Master Plan,” which focused on self-driving capability and battery energy storage systems.
Musk says his “Master Plan 3” is about a “pathway to a fully sustainable energy future for Earth.”
However, the billionaire CEO has remained mostly mum on the details. Musk said Wednesday that March 1 will be a day for investors that is not just for Tesla investors, but also for investors “on Earth.” His comments came during the grand opening of Tesla’s engineering headquarters in Palo Alto.
Musk added that March 1 will be about “explaining how we got to a fully sustainable energy future and that people should have optimism and hope for the future.”
Tesla shares: what analysts expect
Sacconaghi wrote Wednesday that the “biggest issue” for Tesla in its investor day is the state of its next-generation, lower-cost vehicle platform.
“We/investors have no expectations of a product announcement, but incremental details on pricing, deals and especially timing are most important,” Sacconaghi wrote.
Tesla has repeatedly teased an EV that would be priced around $25,000. Chief Financial Officer Zachary Kirkhorn, during the fourth-quarter earnings call, said the “next-generation vehicle platform” was a priority. This could mean that the cheaper and more elusive Tesla Model 2 could come out on March 1.
However, Sacconaghi’s view is that Tesla will not be able to offer a lower-cost platform in high volume by 2025.
Deutsche Bank analyst Emmanuel Rosner also expects Tesla to introduce its lowest-cost third-generation vehicle platform on March 1. Rosner wrote on Thursday that the electric vehicle giant will discuss the role of in-house battery manufacturing technology, capacity expansion and actions to secure raw materials – including lithium.
Lithium supply control
Tesla is reportedly considering a possible bid for Sigma Lithium (SGML), according to Bloomberg. Sigma Lithium has no sales, but is set to begin commercial production at its Brazil site in April. SGML shares soared 16% on the news Tuesday.
Tesla has already advanced construction of a lithium processing plant in Texas, which will be the first of its kind in the US. Tesla has confirmed plans to invest $365 million in the lithium plant. The company has said that commercial production could begin by the end of 2024.
TSLA shares rank fourth in the IBD automaker industry group. Tesla stock has a composite rating of 72 out of 99. The stock also has a relative strength rating of 25. The EPS rating is 99.
Follow Kit Norton on Twitter @KitNorton for more coverage.
YOU MAY ALSO LIKE:
The best funds buy from the industry leader no. #1 near breakout with 364% growth
Get an edge in the stock market with IBD Digital
Tesla Stock in 2023: What Will the EV Giant Do in Its Two Megamarkets?
Halliburton, Baker Hughes and SLB shares return 50% (or more) to shareholders
Chevron Reports Record Profits, $75 Billion Buyback; White House fumes