Yahoo Finance Tesla shares gain after Model Y price hike in US, Europe
By Chibuike Oguh
NEW YORK (Reuters) -Shares of Tesla jumped nearly 7% on Monday after the automaker announced price increases for its Model Y electric vehicles across some European countries and the United States.
Tesla said prices of its Model Y vehicles will be increased by approximately 2,000 euros ($2,177) in some European countries effective March 22, according to a company statement on Saturday. It had announced on Friday price hikes for all Model Y cars in the U.S. by $1,000 effective April 1.
Tesla shares rose as high as $174.72, up nearly 7%, on Monday following the announcements, making it the biggest percent daily gain in more than a month after sliding for two weeks. The stock is now on track for its second straight day of gains after dropping to a near 10-month low last week. It was last up 6.3% at $173.92.
"In light of persistently high Model Y inventory, we view Tesla's preview of future price increases as an attempt to boost sales this month, rather than a sign of solid demand," said Deutsche Bank analysts led by Emmanuel Rosner in an investor note on Monday.
The median estimate of the 49 analysts currently covering Tesla's shares is $193, down from $211.50 a month ago, and their average recommendation is "hold," according to LSEG data.
Goldman Sachs analysts slashed their 12-month price target on Tesla's stock to $190, down from $220, citing obstacles to its ramp in Model 3 production and a manufacturing downtime at its Berlin gigafactory following an arson attack.
Tesla's sales will also be impacted by reduced electric vehicle subsidies in Europe, rising competition in China - which is the company's second-largest market after the U.S. - and slowing demand, the analyst led by Mark Delaney wrote in an investor note on Sunday.
"While we continue to believe that Tesla is well positioned for longer-term growth given its strong position in the EV and clean energy markets ... we believe that softer near-term EV market conditions are weighing on earnings," the analyst said.
(Reporting by Chibuike Oguh in New York; additional reporting by Noel Randewich in Oakland, CalforniaEditing by Nick Zieminski)
