Question: What is $ 200 for a Tesla investor? Answer: One month.
On Friday, Vulbush analyst Dan Ives raised his Tesla (ticker: TSLA) target price by $ 235 per share to $ 950 – a 33% increase the analyst had set for the target only a month earlier. This adds approximately $ 220 billion to $ 250 billion to the company’s target market capitalization. (Where the market price falls in the range depends on whether investors focus on the original or fully diluted shares – the latter includes things like CEO Elon Musk’s stock options.)
Raising Tesla’s price targets has been a requirement for analysts if they want to maintain Buy or Hold ratings. Tesla stock has risen nearly $ 211 since mid-December. Between mid-November and mid-December, Tesla shares rose from $ 410 to $ 640. Recently, Tesla’s stock price jumped about $ 200 at some point during each month.
For analysts, price targets are all about playing catch-up. In mid-December, Ives set a Tesla stock target price of $ 715, a significant increase from their prior target of $ 560 set in November. (However, the previous goal was a mere $ 155 increase.)
Tesla’s $ 211 increase compared to the previous month is even more incredible because a few months ago, it would have actually been worth more than $ 1,000 a share. This is because Tesla has split its stock to five-for-one in 2020. Therefore, on a pre-split basis, the new $ 950 target works out to about $ 4,750 per share. Tesla stock had started at $ 330 on a pre-split basis from 2020 – meaning only 7% of the analyst’s new target.
It has been a notable run. Over the past year, the shares have added about $ 3,700, or 700% – $ 710 billion in market value, based on prior divestitures. Although the number is expressed, it is an impressive achievement.
Ives concluded on Friday that Tesla would deliver more than 1 million vehicles in 2022. Wall Street expects Tesla to deliver 840,000 vehicles in 2021 and 1.1 million vehicles in 2022, so analyst estimates do not appear to stretch.
Ives also wrote that 5 million annual deliveries are nearing the end of the decade. Most do not shy away from Wall Street estimates. 5 million hits represents an average annual increase of approximately 26% for 10 years. Tesla deliveries are expected to grow by around 68% in 2021. Strong demand in China, new capacity in Europe and the launch of Tesla’s Siebertruck are fueling delivery, which has broken hundreds of thousands of borders.
A lot is going right for the company, and Ives’ $ 950 target is the new high on the Street. That, however, is only the rate of Tesla shares. The average analyst price target on Wall Street is a portion of $ 485, well below stock trades.
Nevertheless, bears are also raising price targets dramatically. The average analyst price target, which includes both bulls and bears, is about 15% year to date and about 600% over the previous year.
Tesla stock has outperformed those increases, up nearly 20% year over year and over 700%.
However, the target price increase on Friday had little effect. Tesla stock slipped 0.4% in early trading.
Dow Jones Industrial Average,
For comparison, they were down 0.8% and 0.7%, respectively.
The next major event for the stock will be fourth-quarter earnings due to be reported at the end of January. Analysts and investors will pay full attention to earnings, profit margins and distribution guidance.
Write Al Root at [email protected]