Shares of Tesla Inc (NASDAQ: TSLA) traded into record territory Monday, changing hands at $523 each and above the Nov. 19 record high of $499.27, after Wedbush Securities analyst Daniel Ives raised the stock’s base-case price target to $560 from $500 and said his new bull-case for the ticker is $1,000, up from $800. The new price represents potential upside of 104% from Friday’s price-per-share close.
In a research note to clients, Ives said that as global demand for electrical vehicles (EV) hits a tipping point over the next 18-24 months, Tesla was likely to achieve its million delivery units target by 2023 or possibly sooner. The analyst also said that Tesla’s inclusion in the S&P 500 — a move that had been expected for months — and its “sustained path to profitability” suggests the bull story is now all about an accelerated “EV demand trajectory into 2021.”
Ives also talked in his note about China’s market potential – describing it as a “greenfield EV market opportunity”. In fact, the influential analyst believes the Chinese market could “represent ~40% of (Tesla’s) EV deliveries by 2022“ given the strong demand for EV vehicles across all price points there.
Competition-wise Ives thinks Tesla with its Shanghai Gigafactory, which opened more than e year ago, production capabilities, tech innovations and brand awareness will be well ahead of its Chinese rivals BYD Company Limited (BYDDF), Nio (NIO), XPeng Inc (XPEV), and Li Auto (LI) in the race to mass-produce EVs.
Ives also touched on Europe’s increased focus on reducing carbon footprints and the “Teflon-like demand” for Tesla’s flagship Model 3’s. According to the analyst, these dynamics should further drive consumer focus on EVs, particularly in France, Germany, Italy, and the United Kingdom.
Finally, Ives sees an increase in consumer EV tax credits and incentives in the U.S. under a Biden administration as a positive development for Tesla. If adopted, he thinks the new government program will fuel domestic EV adoption starting next year.
Price Action
Shares of Tesla were up 30 points on the bull-case note on Monday morning. The stock, which closed at $489.61 on Friday, traded as high as $525.15 in Monday’s early Nasdaq trading.
Leave a Reply