Tesla (NASDAQ:TSLA) improved in price after Moody’s assigned it a Baa3 rating and removed its junk-rated credit. Moody’s said the upgrade reflects Tesla’s prudent financial policy and management’s operational track record.
A high-grade credential from at least two agencies is enough to be formally considered a blue-chip credit among ratings-sensitive investors.
Moody’s cited the company’s expanding product offering, including early production of the Cybertruck slated for later this year, its regional production facilities and heightened focus on efficiency and financial leverage after Tesla repaid ~$10B of debt in the last three years
Positives also include the company securing a $5 Billion revolving credit facility this year, having very little outstanding debt, and its five-year credit-default swaps already trading in line with high-grade borrowers.
In October 2021, the company became the first junk-rated company with a market value of more than $1T+
Recently, Tesla paused its production in Shanghai amid factory upgrades. Tesla had previously paused production to start 2023 as well .
In its most recently quarterly results, unveiled in January, Tesla reported $24.3 billion in revenue down $300 million from Wall Street’s expectations, but it did beat earnings expectations with $1.19 per share. The company managed to increase its cash position by just over $1 billion during the quarter and it now sits on an impressive $22 billion pile of cash.
TSLA hurtled $7.89, or 4.3%, to $191.14.