Tesla Stock Target Boosted to $1,400 as EV Maker Seen Owning Big Chunk of ‘EV Revolution’

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Vehicles at a Tesla dealership in Vallejo, California.

David Paul Morris/Bloomberg

Tesla ‘s price target was raised to $1,400 at Wedbush, with analysts saying that the electric-vehicle “revolution” presents a $5 trillion market opportunity “over the next decade with Tesla leading the way.”

Tesla (ticker: TSLA) shares were up about 0.9% on Friday, trading at about $1,106. The S&P 500 was up 0.15% and the Dow Jones Industrial Average had fallen 0.5%. Tesla stock has gained 7% over the past five days and about 22% over the past month.

Wedbush analyst Dan Ives’ $1,400 price target, up from $1,000, matches the Wall Street-high call by Jefferies analyst Philippe Houchois, according to Bloomberg. Friday’s change is another case of Tesla bulls getting more bullish while Tesla bears don’t see what all the fuss is about.

Analysts surveyed by Bloomberg have an average price target on the stock of about $800. That’s up from about $670, or $130 a share, compared with just before Tesla reported better than expected third quarter earnings. Buy-rated analysts have taken their price targets up by about $206 a share, on average, to $1076 from $870 over that span. Sell-rated analyst price targets are up about $81 a share, on average, to $442 from $361.

About 47% of analysts covering Tesla stock rate the shares at Buy. The average Buy-rating ratio for stocks in the S&P is about 55%. About 29% of analysts covering Tesla rate shares Sell. The average Sell-rating ratio for stocks in the S&P is less than 10%.

In a note, Ives wrote that the infrastructure bill signed this week by President Joe Biden “kicks off the first phase of EV infrastructure (charging stations, tax credits) build outs signaling a new era of adoption for electric vehicles in the U.S.”

The legislation will create the first national network of electric vehicle charging stations.

Ives noted how the U.S. has been a “laggard” in the acceleration to electric vehicles, with just 2% of domestic vehicles being EVs.

The analyst said he expects that electric vehicles globally will represent 10% of autos by 2025 and 30% by 2030.

Ives wrote that Wedbush believes there are $5 trillion of “auto/software driven market dollars up for grabs” with Tesla likely to own $2.5 trillion of it. He noted that traditional auto makers such as General Motors (GM) and Ford (F) and upstarts like Lucid Group (LCID) and Rivian Automotive (RIVN) also will be “going after massive consumers dollars up for grabs the next decade.”

Read more: Think Rivian Stock Is Volatile Now? Dec. 6 Could Bring Big Moves.

While Ives boosted his price target to $1,400, his bull case remains $1,800. “If China [EV penetration] accelerates in 2022, the bull case of $1,800 takes hold,” Ives told Barron’s. EV penetration of new car sales hit about 20% in October. That’s a high percentage. For the full year, EVs might amount to about 10% of all new car sales.

Ives estimates China will represent 40% of deliveries for the Tesla next year.  

Write to Joe Woelfel at joseph.woelfel@barrons.com