Connect with us

Oh Tell Me…….

Tesla will continue its monster run and jump another 55% to $2,322, Wall Street firm says (TSLA)


Electric Cars

Tesla will continue its monster run and jump another 55% to $2,322, Wall Street firm says (TSLA)

Despite Tesla’s gravity-defying surge so far in 2020, the stock has more room to run, according to a Monday note from Piper Sandler. Sandler increased its price target on Tesla from $939 to a street-high $2,322, implying potential upside of 55% from Monday’s close. The firm employed a 20-year discounted cash flow model to generate…

  • Despite Tesla’s gravity-defying surge so far in 2020, the stock has more room to run, according to a Monday note from Piper Sandler.
  • Sandler increased its price target on Tesla from $939 to a street-high $2,322, implying potential upside of 55% from Monday’s close.
  • The firm employed a 20-year discounted cash flow model to generate the price target, and credited Tesla with first-mover advantage and software potential as reasons to stay long the stock.
  • In response to the note, Tesla CEO Elon Musk tweeted, “Wow.”
  • Tesla has seen a surge in trading activity as investors speculate that the electric car company may be on the verge of being eligible for inclusion into the S&P 500 index.
  • Visit Business Insider’s homepage for more stories.

Tesla’s gravity defying rally so far in 2020 is set to continue, according to a note from Piper Sandler published on Monday.

The firm more than doubled its previous price target from $939 to a Wall Street-high $2,322, implying 55% upside from Monday’s close.

Sandler employed a 20-year discounted cash flow valuation model to generate its price objective, and chalked up the increase in its price target to “reflect faster-than-expected share gains,” according to the note. The firm also pointed to Tesla’s software opportunity as a reason to stay long the stock.

So should investors ring the register and take profits in Tesla after it surged as much as 328% year-to-date? According to Sandler, “resoundingly, we think the answer is NO.”

Read more: BANK OF AMERICA: Buy these 7 pharma stocks now as they race to develop COVID-19 treatments and vaccines

“It’s hard to see how competitors can catch up,” Sandler said, adding that Tesla’s own building capacity is its biggest constraint to further share gains. The firm said that Tesla might still be able to deliver upward of 500,000 cars in 2020, which would be “impressive” given temporary factory closures caused by the COVID-19 pandemic.

And Tesla could deliver nearly 4 million cars in 2025, capturing almost 10% of market share in the US, Piper Sandler said.

More important to its price target increase, Piper said it believes Tesla’s software, particularly the full self-driving add-on, could allow Tesla to sell cars at “or even below cost, while still achieving higher operating margins” by the 2030s.

Read more: An award-winning PIMCO fund manager who’s crushed 99% of his peers for years told us the 2 trades he’s making to stay ahead – and shared his key to credit investing today

Risks to Piper’s bull thesis include production delays, failure to meet customer expectations, product defects and recalls, supply chain disruptions, and the slow adoption of electric cars.

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

In response to the note, Elon Musk tweeted on Monday night, “Wow.”

If shares of Tesla continue to remain elevated, Musk could receive a $2.4 billion payout. Shares of Tesla have surged on stronger-than-expected second quarter delivery data and speculation that the company may be eligible for inclusion into the S&P 500 index once it reports earnings later this month.

Tesla traded down as much as 4% to $1,431 in Tuesday trades.

Read moreUBS says buy these 18 diamond-in-the-rough stocks that will offer massive gains over multiple years, even as their underlying industries suffer

tesla chart23.JPGMarkets Insider

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *



To Top