Tesla (TSLA) is set to hold its investor day next week, with CEO Elon Musk teasing a reveal of “Master Plan 3” details. Following its past pattern ahead of the event, Tesla stock booked its first weekly slip following a steep six-week climb.
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Before Friday’s retreat, Tesla stock had nearly doubled from its Jan. 6 bear-market low of 101.81, following a historical pattern of TSLA shares running up ahead of similar events. In 2016, Tesla stock went on a monthlong 22% run ahead of Musk’s second “Master Plan” announcement on July 20, 2016.
“While the sample is relatively small, TSLA has — perhaps surprisingly — underperformed in the week before (by 200 bps) and the week following (by 600 bps) investor events over the last three years,” Bernstein analyst Toni Sacconaghi wrote Wednesday.
“All eyes are on TSLA’s upcoming investor day on March 1 and we note that TSLA shares have tended to run up ahead of such events in the past,” CFRA analyst Garrett Nelson added recently.
Tesla stock dropped 2.6% to 196.82 in market trade on Friday. TSLA shares advanced 0.6% to 202.07 Thursday. On the week, Tesla stock fell 5.5%, but shares have gained around 90% since Jan. 6.
Tesla stock appears to be forming a handle of some sort. If Tesla stock consolidates until the investor’s day event on Wednesday, a breakout then would likely involve clearing the 200-day moving average.
Master Plan Number 3
Tesla’s first Master Plan, revealed in August 2006, presented the company’s goal to build a wide range of EVs. Around 10 years later, Musk revealed his second “Master Plan,” which was focused on self-driving capability and battery energy storage systems.
Musk says his “Master Plan 3” is about a “path to a fully sustainable energy future for Earth.”
However, the billionaire CEO has been mostly mum on details. Musk on Wednesday said March 1 will be an investor day that is not just for Tesla investors but for investors “in Earth.” His comments came during the unveiling of Tesla’s Engineering HQ in Palo Alto.
Musk added March 1 will be about “explaining how we get to a fully sustainable energy future and that people should have optimism and hope for the future.”
Market Rally Damaged; Will Investor Day Fuel Tesla?
Tesla Stock: What the Analysts Expect
Sacconaghi wrote Wednesday the “most important issue” for Tesla going into its investor day is the status of its next-generation, lower-cost vehicle platform.
“We/investors have no expectation for a product announcement, but incremental detail on pricing, offering and especially timing is most important,” Sacconaghi wrote.
Tesla has repeatedly teased an EV that would sit around the $25,000 price point. CFO Zachary Kirkhorn during the Q4 earnings call said the “next-generation vehicle platform” was a priority. This could mean the cheaper, elusive, Tesla Model 2 could be floated on March 1.
However, Sacconaghi’s view is Tesla will not be able to deliver a lower cost platform in high volume by 2025.
Deutsche Bank analyst Emmanuel Rosner also expects Tesla to introduce its lower cost third generation vehicle platform on March 1. Rosner on Thursday wrote the EV giant will speak about the role of in-house battery manufacturing technology, capacity expansion and actions to secure raw materials — including lithium.
Controlling Lithium Supply
Tesla is reportedly mulling a possible bid for Sigma Lithium (SGML), according to Bloomberg. Sigma Lithium has no sales, but is poised to start commercial production at its Brazil site in April. SGML shares soared 16% on the news Tuesday.
Tesla has already made progress on building a lithium processing facility in Texas, which will be the first of its kind in the U.S. Tesla has confirmed plans to invest $365 million in the lithium plant. The company has said commercial production could get underway by the end of 2024.
TSLA shares rank fourth in IBD’s Auto Manufacturers industry group. Tesla stock has a 72 Composite Rating out of 99. The stock also has a 25 Relative Strength Rating. The EPS Rating is 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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