Tesla Motors Inc. (TSLA), the fastest-growing automotive stock this year, rose as the Model S sedan maker moves ahead with plans to expand its business in the absence of reports of car fires.
The shares gained 3.1 percent to $152.46 at the close in New York, the highest price since Nov. 5.
Tesla, led by billionaire entrepreneur Elon Musk, plunged in November after reports of battery-related fires in its Model S vehicle that month and in October. A third incident last month led the National Highway Traffic Safety Administration to open an inquiry. The impact of those reports has eased, said Andrea James, an equity analyst for Dougherty & Co., and Brian Johnson, a Barclays Plc analyst.
James recommends buying the Palo Alto, California-based company’s shares, while Johnson has the equivalent of a hold rating on the stock.
Tesla has rebounded by more than 26 percent since closing at $120.50 on Nov. 26.
The Model S premium sedan starts at $70,000 and can sell for more than $100,000. The company is taking orders for the car in China, where sales start early next year, using a new Chinese-language website, the Technode.com said Dec. 15.
Tesla’s plans for a lower-priced electric car due in 2016 are on track, with a version to be shown as early as January 2015, the Los Angeles Times reported on Dec. 14. Both are positive developments, said James and Johnson.
The automaker was also added to press conference schedule for the North American International Auto Show in Detroit next month.
Tesla’s increase appears to be “strictly technical,” said Craig Irwin, an equity analyst with Wedbush Securities in New York, who rates Tesla outperform. Along with an absence of new negative news, the share price rise also may reflect a covering of short positions by investors who’ve decided the stock’s downturn is done for now, Irwin said.
To contact the reporter on this story: Alan Ohnsman in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Jamie Butters at email@example.com