Does a $1250 price target on Tesla make any sense? Apparently Wall St. thinks it does.
Analyst Dan Ives also boosted his ‘bull case’ target to $1,250, but kept the neutral rating he’s had on Tesla for nearly 2 years
Tesla Inc. got a another bullish endorsement Friday from Wedbush’s prolific analyst Dan Ives, who raised his stock price target by 33%, but he still won’t recommend investors buy the stock.
Ives said the “hearts and lungs” of investors’ bull thesis on Tesla (TSLA) has been centered on China, as consumer demand has skyrocketed into 2021, not just for Tesla’s Model 3s, but for electric vehicles from “impressive” domestic competitors such as Nio Inc. (NIO), Li Auto Inc. (LI) and Xpeng Inc. (XPEV)
He said although competition is increasing, Tesla “remains top of the EV mountain.” And given the “robust” demand globally for EVs, Ives now expects Tesla to surpass the 1 million delivery threshold in 2022, and said deliveries could start to approach 5 million a year by the end of the decade.
“While there are 150+ auto makers aggressively going after the EV opportunity globally, right now in the EV market we believe it’s Tesla’s world and everyone else is paying rent,” Ives wrote in a note to clients.
He lifted his “base” price target for Tesla to $950, which is 15% above Friday’s closing price, from $715. His target is now the highest of the 37 analysts surveyed by FactSet, and nearly double the average target of $499.30.
Tesla’s stock slumped 2.2% to $826.16 on Friday, reversing an earlier gain of as much as 1.8% to an intraday high of $859.90. The stock has now lost 6.5% since the Jan. 8 record close of $880.02.
Joe Biden as president and a Democrat-controlled Congress should also provide a tailwind for the EV sector, Ives said. “A Blue Senate is very bullish and a potential ‘game changer’ for Tesla and the overall EV sector in the U.S., with a more green-driven agenda now certainly in the cards over the next few years,” he wrote.
Ives also raised his “bull case” price target by 25%, to $1,250 from $1,000.
What are your thoughts?
(Do your own due diligence, your capital is at risk when you invest, not investment advice)