Why Tesla shares might be about to push higher

Where are Tesla shares going next? And what could move the share price higher? Stephen Wright sets out three reasons why the answer might be ‘up’.

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Key Points

  • Tesla's stock split will likely push the company's share price higher without affecting the underlying business
  • Elon Musk has a strong track record of managing the narrative around Tesla shares
  • Tesla is continuing to ramp up its production at a rapid pace, with new factories coming online to improve capacity

Tesla Motors (NASDAQ:TSLA) stock has been pushing higher this week after the company announced an intention to split its stock later this year. Tesla shares jumped on the news and have since advanced again on the back of a positive day for markets. 

It’s been a tricky few months for Tesla shares, though. From its high of $1,243.49, the stock fell to around $766 before the recovery triggered by the announcement of the split. But with Tesla shares approaching their all-time-highs again, could they be about to push higher?

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I think that they could. Here are three reasons why.

Earnings success

First of all, Tesla has consistently exceeded expectations in its earnings reports. I think that the pace at which Tesla is opening new factories and bringing production online will mean that it continues to grow rapidly and post impressive results for some time to come.

The company next reports earnings on 25 April. I expect the new Berlin factory to help push deliveries higher and I expect Tesla shares to move higher after its earnings call.

Splitting the stock

The second reason that I believe the Tesla share price might move higher from here to new record levels is that the company seems to want it to. This is the second time that the company has decided to split its stock in the last few years.

The split makes no fundamental difference to the underlying business, but it does tend to cause the price to go up. I think that the stock split indicates that the company wants its market cap higher and is willing to make moves to try and push the price up.

Elon Musk

Lastly, I see Tesla ‘Technoking‘ Elon Musk as a key part of the case for thinking that Tesla shares might reach new highs in April. As I see it, Musk is extremely skilled in managing bad news and the effect that it might have on the company’s share price. 

At the previous earnings call, Musk’s comments about the importance of a humanoid robot diverted attention away from delays to the launch of the company’s electric truck. And the upcoming stock split announcement masks the news that Tesla’s Shanghai factory has been shut down for four days.

Conclusion — where are Tesla shares going next?

I wouldn’t be at all surprised to see Tesla shares reach new highs in April. I think that there are some important catalysts that might move the price further still. 

From an investment perspective, though, I’m going to leave this one for others. The company’s valuation still seems a bit on the expensive side to me. I also find Elon Musk a bit too unpredictable for my money. And I struggle to understand the scope of Tesla’s competitive advantage in the race for autonomous driving. 

I’m therefore looking elsewhere for opportunities to invest at the moment. But I’m anticipating Tesla’s shares reaching new highs in the near future.

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Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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