An upgrade from a bearish analyst has Tesla shares rising again on Tuesday, pushing the stock up more than 12% and back above the $700 threshold.

The reason for the upgrade, however, feels unusual: It’s related to the Covid-19 pandemic. Credit Suisse analyst Dan Levy believes Tesla (ticker: TSLA) is in a better position than other auto makers to manage the transition to battery-powered vehicles while the pandemic cripples the global economy and industry volumes crater.

“Amid coronavirus upheaval, Tesla better positioned in Two Clocks world,” wrote Levy in a Tuesday research report. His “two clock” analogy refers the situation traditional auto makers are facing. Companies such as General Motors (GM) and Ford Motor (F) must transition product portfolios away from gas-powered engines toward battery-powered platforms. It’s a long-term problem. That’s one clock. The transition needs to happen even while earnings and cash flow dry up in a recession. The downturn is a near-term woe. That’s the other clock.Tesla’s electric-vehicle lead over traditional auto makers is, essentially, extended by Covid-19 turmoil.

“Tesla is only working on one clock,” says Levy. “It is solely focused on electrification and doesn’t have the dilemma of balancing a transition.”

Recession might be too gentle to describe what is happening to U.S. light vehicle sales. Industry volumes are plummeting. U.S. auto sales in March fell more than 30%, and analysts expected deeper declines in April .

Tesla, of course, will see demand weaken in the second quarter, like other auto makers, but Levy notes that Tesla’s liquidity is improved and “basic execution” has been better lately.The electric vehicle pioneer recently sold shares to the public, raising billions. What’s more, free cash flow generated from operations has been positive for several quarters .

Despite the bullish tone, Levy isn’t fully on board with Tesla shares. He only upgraded the stock to Hold from the equivalent of Sell. Levy’s price target went to $580 from $415 a share, still below recent levels.

Tesla is always a controversial stock . In fact, only a fraction of analysts covering the company rate shares the equivalent of Buy. But the debate hasn’t hurt share price performance. Tuesday’s move adds to Monday’s gains. Stock in the electric-vehicle pioneer rose almost 14% Monday, far better than the 1.4% drop of the Dow Jones Industrial Average and the 1% decline in the S&P 500. Tesla stock has surged almost 70% year to date.

The company’s $120 billion market value is greater than the combined equity-market capitalization of Ford, GM, and Fiat Chrysler Automobiles (FCAU).

Next up for Tesla is earnings. Wall Street expects Tesla to report a loss of 29 cents a share from $6 billion in sales for the first quarter. Sales are expected to grow about 33% from $4.5 billion in the first quarter of 2019. In addition to earnings, analysts and investors are awaiting Tesla’s “battery day,” when it will showcase its technology. The event was scheduled for April, but had to be postponed. “Musk indicated that the event will focus almost entirely on batteries since there is much to discuss,” wrote Deutsche Bank analyst Emmanuel Rosner in another Tuesday research report. He expected the event to happen in mid-May.

Write to Al Root at allen.root@dowjones.com

https://www.barrons.com/articles/tesla-stock-covid-19-economic-turmoil-51586873902?siteid=yhoof2&yptr=yahoo