Why Tesla Stock Rose Today

© Provided by The Motley Fool Why Tesla Stock Rose Today

What happened

Tesla (NASDAQ: TSLA) stock is moving higher for the second straight day today. After jumping another 3.7% in early trading, Tesla shares were up 1.6% at 2:23 p.m. ET, bringing its two-day gain to about 7%. 

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So what

The moves higher came after one analyst still sees more than 50% upside for Tesla stock even in the face of economic headwinds, as well as a report that the EV leader might have its sights set on the next location for another manufacturing plant. 

Following Tesla’s third-quarter earnings report last week, Morgan Stanley‘s Adam Jonas lowered his price target on the stock to $330 per share from $350. Though Jonas said he wanted to “make room for unexpected headwinds” in the current economic environment, the new price target is still more than 50% higher than where Tesla stock started this week. Other news came from Reuters reporting that Tesla CEO Elon Musk may be planning on a new investment in Mexico. 

Now what

Musk reportedly met with the governor of the northern Mexican state of Nuevo Leon, which borders Texas. The meeting also included other local officials and the U.S. ambassador to Mexico, Ken Salazar, according to Reuters

Several U.S. automakers have operations and suppliers in Mexico, and it remains unclear if Musk is eyeing the area for a new production facility or some other need. Musk has said his company would eventually likely need about 12 manufacturing plants to produce the volume he eventually strives for. Tesla is currently ramping up its third and fourth facilities in Germany and Austin, Texas. 

Investors want to see that growth from the company, regardless of where Musk identifies the next site or sites. The report that he may be making progress on a new investment seems to have investors buying back into the stock this week after it has declined more than 35% year to date.

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Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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