Shares of Tesla TSLA surged about 5% in early morning trading Wednesday after shareholders at the company's annual meeting backed Elon Musk as chairman and CEO, and Musk responded by revealing that Tesla is nearing its weekly Model 3 production goal.
Musk told shareholders it is "extremely likely" the electric car giant will hit a weekly production rate of 5,000 Model 3 cars by the end of the current month. The polarizing CEO also said Tesla will soon be producing more batteries at its Nevada-based Gigafactory than all other electric car companies combined.
His comments followed two separate votes to strike down proposals intended to split the CEO and chairman roles and disrupt Tesla's board of directors.
Tesla's struggle to reach its target Model 3 production rate has created financial headaches and cast doubt on Musk's leadership. Nevertheless, this week's voting suggests that Tesla shareholders are willing to give the tech pioneer more time-at least for now.
Meanwhile, Tesla's head of worldwide sales, Robin Ren, revealed that the automaker is slated to open a factory in Shanghai, which would be its first production facility outside of the United States. Chinese regulators recently policies that would allow foreign electric vehicle makers to fully own their factories there. Building a plant in Shanghai will allow Tesla to avoid certain tariffs.
Tesla will hope the near-term bullishness coming out of the investor conference makes its way to analysts, who have been largely skeptical about the company's performance this year. In fact, production issues and caution-inducing comments from Musk have led to a number of negative revisions to the company's fiscal 2018 earnings estimates in recent weeks.
Tesla has witnessed nine downward revisions to its EPS estimates for the current fiscal year within the last 60 days. This activity has moved the Zacks Consensus Estimate for the year nearly 40 cents lower in that time. The automaker is now expected to see an adjusted loss of $8.29 per share in 2018.
But looking further ahead, that analyst picture looks a lot better. Current estimates suggest Tesla will surge into profitability in 2019, with full-year consensus projections calling for $1.86 per share in adjusted profits. That would represent growth of about 122% from this year's projected totals.
This upbeat earnings outlook has helped TSLA earn a Zacks Rank #2 (Buy). Shares also seem to be recovering from recent stretches of prolonged volatility, and the stock is now up more than 15% from its 52-week low reach on April 2.
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