Shares of Tesla Inc (NASDAQ: TSLA) rose as much as 3% in pre-market trading Thursday after Goldman Sachs’ (GS) Mark Delaney upgraded the automaker’s stock to “Buy” from “Neutral” with a price target of $780, up from $455.
In lifting the target in his Dec. 2 report, Delaney noted that moves by governments around the world to pass regulations to phase out sales of higher-emission vehicles will, in turn, improve the sales outlook for electric vehicles.
The analyst also said that if the industry continues its shift towards mainstream electric vehicle (EV) adoption at a quicker pace than he anticipates, and if Tesla maintains its share of the EV market in the mid-to-high 20% range, then the Elon Musk-led company could reach a production level of 15 million units by 2040, or 20 million in case of an upside scenario.
Tesla’s current goal is that of delivering 500,000 cars to customers this year and plans to expand production with new factories in Germany and the U.S.
Delaney, who sees Tesla’s margins expanding on the basis of a “mix shift toward the Model Y.” also said that he believes the company’s integrated model is helping it “sustain a leadership position in the EV market.”
Goldmans’ current price target is now the highest on Wall Street.
Tesla stock was up 23 points, or 3.97%, to $591.41 in Thursday’s early session. The $556 billion market cap name is up more than 760% year-over-year through Wednesday versus the S&P 500’s 17.7% gain.