Tesla travelling smoothly as its shares bounce back above $US1000

As petrol prices fly higher, Australia’s most popular overseas stock gained a third in price inside a week.

A new car leaves Tesla’s factory in Germany this week. Picture: Pool / Getty Images

Tesla, Australia’s most popular overseas stock, has roared back above $US1000, gaining for a seventh straight session this week even while the rest of the market is in the red.

The break above the $US1000 mark happened midweek – the shares jumped sharply on Wednesday before closing on Thursday at $US1013.92. The S&P 500 and Dow Jones Industrial Average were down about 0.4 per cent and 0.6 per cent respectively in the same session.

If the gain lasts, this would mark Tesla stock’s highest closing level since January 18, when it closed at $US1030.51, according to Dow Jones Market Data. The seven-day rally, for a gain of 34.4 per cent, is the longest winning streak since the seven sessions ending on August 5. And the gain is the best for a stretch of that length since the stock rose 35.2 per cent in the seven days to the end of November 1.

The shares are up 18.3 per cent so far in March, putting Tesla stock on pace for the best month since October last year.

The electric-vehicle business makes for strange bedfellows. A diverse group of stakeholders, ranging from oil companies to politicians, want to make sure the US has the resources needed to build battery-powered cars.

That is good for shares of electric-vehicle leader Tesla as well as the stocks of traditional car companies that want to be significant EV players such as Ford and General Motors. Those three companies alone want to be producing 7 million electric-vehicles globally by 2026 – more than twice the number sold worldwide last year.

But there isn’t much news on which to pin Wednesday’s gains. Wall Street analysts don’t seem to be playing a role. A few firms have changed their price targets for the stock, but there has been nothing striking.

Interest rates aren’t helping ­either. The yield on the US 10-year Treasury note is up about 0.2 percentage points over the past week.

Higher rates hurt richly valued growth stocks such as Tesla more than others because the bulk of those companies’ profits are expected to roll in years from now. When rates rise, the discounted current value of those future earnings falls.

The move seems to be a carry-over from events earlier in the week. Tesla opened its Germany manufacturing facility on Tuesday. And before that, CEO Elon Musk tweeted about his “Master Plan 3”, which would follow plans written in 2006 and 2016. The third iteration will include comments about scaling Tesla to “extreme size”, according to the CEO.

Tesla is expected to deliver about 1.5 million units this year, up from 936,000 in 2021. The company wants to increase its production and sales volumes at 50 per cent a year on average for the foreseeable future.

Investors might also be feeling upbeat about the outlook for Tesla’s first-quarter delivery numbers. That data is due to be reported around April 2. Wall Street currently projects Tesla will deliver about 322,000 vehicles.

This is an edited version of recent coverage of Tesla from Barrons.