Tesla Is One Step Away From Blue-Chip Status, Faces 'High Expectations' Right Now

Tesla Inc TSLA is set to announce its fourth-quarter financial results after the market closes.

The EV company faces "high expectations tonight, that's for sure," Virtus Investment Partners' Joe Terranova said Wednesday on CNBC's "Fast Money Halftime Report."

Tesla stock successfully held its 200-day moving average support level during the sell-off on Monday, which keeps the bullish trend intact.

"They've got to exceed expectations here in the near term to extend the positive momentum," Terranova emphasized.

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He owns Tesla shares and plans to hold through earnings, but Terranova is actually more focused on the long term.

"In the last two years, Tesla has paid down $5 billion in debt," he said. "That allows them now to be one step away from being a blue-chip company, that's right, being investment grade."

Moody’s on Monday upgraded Tesla's debt rating from a "Ba3" rating to a "Ba1" rating, citing improving profitability and scaling prospects.

Terranova expects Tesla to assume blue-chip status about a year from now, which will allow the company to benefit from cheaper financing, he said.

"It's a remarkable balance sheet recovery and that's why you're owning the stock for the long term."

TSLA Price Action: Tesla has traded as low as $539.49 and as high as $1,243.49 over a 52-week period.

The stock was up 4.7% at $962.41 at the time of publication.

Photo: courtesy of Tesla.