What's Driving Tesla Shares Higher On Wednesday

On Wednesday, longtime Tesla bear Citigroup raised its investment rating on the stock to Neutral from Sell and raised the price target from $141.33 to $176, as reported. Ahead of Tuesday's session, the stock had dropped to a three-year low, which wiped out about half a trillion off its market capitalization.

The upside seen in the premarket session may be traced back to positive analyst commentary on the stock. Late Wednesday, Morgan Stanley (NYSE:MS) analyst Adam Jonas said he will continue to own Tesla stockas it offers 100% upside potential from the current levels.

Jonas noted that Tesla is the only pure play electric vehicle maker in his coverage universe that generated a profit and positive free cash flow.

Analyst Itay Michaeli predicated the action on the year-to-date pullback that has balanced out near-term risk/reward. The analyst moved to a Sell rating on Tesla in September 2018 and had maintained theon the year-to-date pullback that has Analyst Itay Michaeli predicated the action balanced out near-term risk/reward. The analyst moved to a Sell rating on Tesla in September 2018 and had maintained the rating since then.

As well known, Tesla, Inc. designs, develops, manufactures, sells and leases fully electric vehicles and energy generation and storage systems, and offer services related to its products.

Price Action: In premarket trading on Wednesday, Tesla rose 1.63% to $172.68, according to Benzinga Pro data.