Tesla Gains Ground After Opening A Solar-Powered Charging Station In China
Tesla shares gained upside momentum and moved above the $650 level after the company announced that it had opened a solar-powered charging station in Tibet. The station in Tibet is the first such facility in China, and it includes on-site power storage.
This moved reminded investors that Tesla has a solar business that may serve as an additional source of growth in the future. At this point, the solar business, which Tesla acquired with the purchase of SolarCity back in 2016, gets much less attention than the company’s car business, but the situation may change if Tesla finds a way to grow it at a robust pace.
What’s Next For Tesla Stock?
While the new charging station in Tibet may prove to be an important milestone for the company, it looks that the current upside move is fueled by general market optimism.
Powell’s recent comments were dovish as usual, the yields of 10-year Treasuries have settled below 1.50% while S&P 500 is trading near historic highs. In this environment, Tesla has the opportunity to attract additional investor attention as it trades more than 25% below highs that were reached at the beginning of this year.
Meanwhile, analyst’s estimates for Tesla have remained stable in recent weeks. Currently, analysts expect that Tesla will report earnings of $4.53 per share in 2021. In 2022, the company’s earnings are projected to grow to $6.22 per share, so Tesla is trading at 105 forward P/E.
This valuation implies huge growth in the upcoming years which often makes a stock very sensitive to various news. In Tesla’s case, the market is already accustomed to sky-high valuation, so the near-term dynamics of its stock will mostly depend on general market sentiment towards tech stocks while traders wait for the second-quarter earnings season.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire