Tesla reverberations: EV peers rally while Uber and Lyft fall back; TSLL +26%

Tesla (NASDAQ:TSLA) rallied in early trading on Thursday after posting one of its strongest earnings reports in a while and putting a jolt bolt back into the bull thesis. The electric vehicle automaker topped EPS, automotive gross margin, and free cash flow expectations with the report, despite seeing lower average selling prices.

During the earnings call, Elon Musk threw out a projection of 20% to 30% deliveries growth in 2025, which was a surprise. Reining that in a bit, Morgan Stanley analyst Adam Jonas forecasts 14% year-over-year deliveries growth for Tesla (TSLA) after assuming ASPs come down ~5% to achieve that growth. Jonas also recommended that investors keep FSD expectations managed, due to elevated uncertainty around regulatory approval, data efficacy, insurance, and other factors. “The journey to autonomous mobility will ultimately be gated by demonstrable/validated safety thresholds,” he warned. Morgan Stanley kept an Overweight rating on TSLA and a price target of $310 after boosting the FY24 EPS estimate to $2.36 and FY25 EPS estimate to $2.74.

On the more cautious side of the ledger, Roth MKM analyst Craig Irwin said Tesla (TSLA) is positioned to continue executing reasonably well, but that shares are valued at an oversized premium to all peers. “The market valuation appears to rest on the assumption that competing EVs slated for launch in coming years will all be flops,” he noted. Irwin singled out BYD Company (OTCPK:BYDDY) as a company that proves Tesla (TSLA) does not operate in a vacuum.

Seeking Alpha analysts are mixed on the implications Tesla (TSLA) earnings report, with both bulls and bears offering their post-earnings appraisals of the EV stock.

Shares of Tesla (TSLA) were up 13.15% in premarket trading to $241.37. The Direxion Daily TSLA Bull 2X Shares ETF (TSLL) shot up 25.88%. Rivian Automotive (RIVN) rose 2.75% and Lucid Group (LCID) was up 2.05% in the early session. Meanwhile, Uber Technologies (UBER) fell 2.77% and Lyft (LYFT) was down 2.64% after Elon Musk said Tesla (TSLA) would have a ride-hailing service in Texas and California next year.