Tesla (NASDAQ:TSLA) is preparing to report its deliveries for the second quarter of 2022. Reports indicate that it is coming in early July, likely this week. After the turbulent season it has had, the electric vehicle (EV) leader could use some good news. Wall Street expectations aren’t high. It’s no secret that macroeconomic headwinds that created considerable turbulence across markets, particularly for the tech sector. TSLA stock has lost 36% of its value over the past six months but the upcoming delivery report may help signal a the turnaround that it needs.
Plenty of experts remain skeptical of Tesla’s growth potential. They know that between supply chain disruptions and rate hike-induced market selloffs, TSLA stock has been fighting an uphill battle. Mizuho analyst Vijay Rakesh recently reduced his price target for Tesla, as well as several other prominent EV stocks. But as Wedbush’s Dan Ives recently noted, Tesla has the potential to generate new momentum. While shares are down 1.2% today, Ives has his eyes on the road ahead where he sees growth.
A ‘Line in the Sand’ for TSLA Stock
A notorious Tesla bull, Ives turned some heads when he reduced his TSLA stock price target last month. However, he maintains a “buy” rating foresees growth in the company’s future. “On an apples-to-apples basis when factoring in the Giga Shanghai shutdown, we believe the line in the sand for deliveries is roughly 250k globally with anything above 260k viewed positively by the Street” he reported. “We believe Model Y/3 units in the 240k/245k as ‘good enough’ by the Street.” In the following tweets, Ives laid out his case in more detail:
In a nutshell, while June delivery numbers will be ugly and nothing to write home about the Street will be focused on the trajectory for 2H and the overall demand picture staying firm. Tesla is still on pace to increase deliveries roughly 50% year over year in 2022
— Dan Ives (@DivesTech) June 30, 2022
The macro perspective presented by Ives is important for investors to note. It has been easy to regard TSLA stock through a bearish lens recently, particularly after Elon Musk referred to its factories as “giant money furnaces.” His quest to acquire Twitter (NYSE:TWTR) hasn’t help inspire confidence either. But if Tesla does increase deliveries by 50% over the year, it will demonstrate to investors that the company still has strong growth potential. And that is exactly what they need to see if faith in TSLA stock is going to be restored.
It is likely that Tesla will do exactly that, pending no further complications. Despite supply chain disruptions and shutdowns in Shanghai, Tesla has remained at the top of the EV sector. Now more than ever, it is important for investors to see the bigger picture when it comes to TSLA stock and not be spooked by bearish coverage.
The Bottom Line
Wall Street expectations for Tesla’s Q2 deliveries are low but that may end up helping TSLA stock. If Tesla exceeds delivery forecasts, as Ives noted, it will push TSLA stock up. The line in the sand that he outlined is one that Tesla can easily meet. It can certainly reach the 240,000 – 245,000 mark that Ives designated as the “good enough” line. And when it does, TSLA stock will rise, even if it is temporary.
The current economic landscape looks bleak in the short-term for most high-growth tech stocks. But Tesla has the potential to come out of this downturn as strong as ever. Investors need to focus on the road ahead, not the current obstacles.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
