Shares of electric automaker Tesla rose during Tuesday’s trading session after one Wall Street firm raised its Model 3 production estimates by 50%.
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Keybanc Capital Markets analyst Brad Erickson released a note to investors on Monday, saying that he now expected Model 3 deliveries for the second quarter to hit 30,000 vehicles, versus previous estimates of 20,000. The firm raised its expectations based on conversations with sales centers, finding that Model 3 volumes are showing “meaningful ramp.”
For the year, Keybanc also raised its Model 3 delivery forecast to 118,182 from 98,182.
Following the news, Tesla stock climbed more than 6%.
The firm maintained its sector weight rating on the stock, based on the idea that customers will continue to value its “innovative superiority” and that there was not enough evidence to support the bear case over the near-term. However, the analyst still thought the longer-term debate on the merits of the stock is more neutral.
Model 3 production has been viewed as a critical bellwether of Tesla’s near-term profitability. While the automaker has struggled with its ramp up, CEO Elon Musk said last week that the company could begin churning out 5,000 vehicles per week by the end of the month, a target it set out to hit by the end of the second quarter. Tesla began the quarter at a rate of just 2,000 vehicles.