Tesla’s shares increased 20% on Tuesday, rebounding from a deep selloff and on track for its largest one-day gain in almost 8 years after data showed an increase in China sales and an analyst raised his rating on the electric car maker.
The surge, which added over $100 billion to Tesla’s market capitalization, would end a 5-day streak of losses for the company in a Nasdaq slump in which investors spooked by rising interest rates have abandoned growth stocks with heady valuations.
New Street Research analyst, Pierre Ferragu, raised his Tesla rating to “buy” from “neutral,” and upped his target price to $900 from $578.
The stock of Tesla was last at $669 and it was heading for its strongest 1-day performance since May 2013. The stock remains down more than 20% from its January record high.
“As much as the market severely corrected the recent excesses of optimism reflected in Tesla’s valuation, our recent work strengthened our confidence about the solid outlook for the company in the next 2 years,” Ferragu wrote in a client note.
Chinese auto industry body CPCA announced that Tesla sold 18,318 China-made vehicles in February, up from 15,484 in January.
After the recent market volatility, Tesla’s stock remains up nearly 70% over the past 6 months. Thirteen analysts have neutral ratings on Tesla, while 12 recommend buying and 10 recommend selling, according to Refinitiv.
Tuesday’s Tesla rally accompanied a 4.2% jump in the Nasdaq, as U.S. bond yields retreated and investors picked up battered technology stocks. Tesla was the biggest contributor to Tuesday’s 2.1% gain in the S&P 500, which it joined in December.