Tesla Shares Rise Following Trump’s Model S Purchase, Earnings Outlook Mixed

Tesla (TSLA) shares closed the last trading session at $230.58, reflecting a 3.8% increase. This uptick came alongside notably high trading volume, with more shares exchanged than usual. However, it should be noted that this performance stands in contrast to the stock’s 36.7% decline over the past month.

The surge in Tesla’s stock price coincided with President Donald Trump purchasing a Model S, a move interpreted as endorsement for Elon Musk’s electric vehicle company. This support arrives during a period of scrutiny concerning Musk’s connections to Trump’s political stance.

Looking ahead, Tesla is projected to report quarterly earnings of $0.59 per share, marking a year-over-year increase of 31.1%. Revenue forecasts stand at $24.09 billion, indicating a 13.1% rise compared to the same quarter last year.

While earnings and revenue growth are crucial for assessing stock performance, research highlights a strong link between earnings estimate revisions and stock price changes. In Tesla’s case, the current consensus EPS estimate has dropped by 0.8% over the past month. Historically, a declining trend in earnings estimates tends to correlate with price depreciation, suggesting investors should remain vigilant about TSLA’s future trajectory.

Currently, the stock holds a Zacks Rank of #3 (Hold). For those interested, you can explore the complete list of Zacks Rank #1 (Strong Buy) stocks here.

Tesla operates within the Zacks Automotive – Domestic industry. Comparatively, Ford Motor Company (F) closed the last trading day 2.7% lower at $9.69, although it has seen a 7.8% return over the past month.

Ford’s consensus EPS estimate has seen a dramatic change of -61% over the last month, now projected at $0.05, which is an 89.8% decrease from the previous year’s EPS. Ford also maintains a Zacks Rank of #3 (Hold).

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Tesla, Inc. (TSLA): Free Stock Analysis report

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This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.