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Feb. 4, 2020, 7:38 a.m. EST

Tesla stock rockets past $750 after analyst sets new Street-high target

Tesla to reap the benefits of being ‘dominant’ EV player, Argus says

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By Claudia Assis, MarketWatch


Bloomberg News/Landov
A Tesla drives along the promenade ahead of the World Economic Forum in Davos, Switzerland, in January.

Tesla Inc. stock rallied more than 20% on Monday after one analyst set sights on it past $800.

Argus Research analyst Bill Selesky raised his price target on Tesla to $808, from $556, and kept his rating on the stock at a buy. That price target implies gains of 11% from Monday’s prices and is among the highest on Wall Street.

Tesla /zigman2/quotes/203558040/composite TSLA +7.56%  shares closed at $780 and traded as high as $786.14, setting a new record close and a new intraday high. It was the stock’s largest one-day percentage increase since May 9, 2013, when it rose 24.4%. The stock has gained for five straight sessions and has been hitting ever-higher marks since mid-December.

“Our positive view assumes continued revenue growth from the legacy Model S and Model X, as well as strong demand for the new Model 3, which accounted for more than 80% of (fourth quarter’s),” Selesky said.

“Despite past production delays, parts shortages, labor cost overruns, and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond.”

Related: Tesla shorts ‘trampled,’ face more than $1.5 billion in paper losses

Selesky is the latest analyst to raise expectations for Tesla on the back of a strong quarterly earnings beat.

Tesla last week topped heightened Wall Street hopes for its fourth quarter and perhaps more crucially set itself the goal of selling more than half a million vehicles this year. It also revealed that production of its next vehicle, a compact SUV called the Model Y, was ahead of schedule.

The electric-car maker warned that the ongoing coronavirus outbreak may affect its first-quarter profits, calling for a slight delay in the production ramp of its Shanghai-built Model 3 due to a virus-related factory shutdown. But since production there is in its early stages, that impact is limited, Tesla has said. It added it was not aware of “material” supply disruptions for its cars built in California.

See also: Elon Musk stands to get even richer if Tesla’s market cap tops $100 billion

The beat and the optimistic outlook prompted a few Tesla skeptics to question their bearishness and provided plenty of fodder for bulls.

Tesla shares have gained 132% in the past 12 months, far outperforming advances of 20% and 13% for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.38%  and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.36%  .

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 898.10
+63.10 +7.56%
Volume: 15.09M
June 1, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$154.87 billion
Rev. per Employee
$439,627
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/zigman2/quotes/210599714/realtime
US : S&P US
3,055.73
+11.42 +0.38%
Volume: 2.50B
June 1, 2020 5:27p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
25,475.02
+91.91 +0.36%
Volume: 341.22M
June 1, 2020 5:27p
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Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.

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