Tesla Stock at $7,000 by 2024? One Analyst Says So and Shares Are Flying.
|Date | 04-02-2020 - 09:22 AM||Article Type | Stock Markets||Region | World|
Tesla shares just keep on gaining after the company’s better-than-expected earnings, and the electric-car maker’s stock was on the rise Monday after two price-target increases.
Tesla stock (ticker: TSLA) was up 12% after analysts at Argus Research and ARK Invest weighed in on the shares. The stock is up a remarkable 145% over the past three months.
On the back of Tesla’s strong fourth-quarter earnings report on Jan. 29, Argus’ Bill Selesky raised his price target to $808 a share and kept his Buy rating in a note to clients on Monday. Tesla shares were at $780 at the close, up 19.9%. Selesky’s previous price target was $556 a share.
“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 2019] production,” Selesky wrote. “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.”
Tesla is expecting to deliver half a million cars in 2020, due in part to increased production at its Shanghai facility. The car maker also has said it is forecasting positive quarterly cash flow this year and that it will generate positive net income on a GAAP basis, Selesky noted.
Tesla also got a price-target increase from its biggest bull. ARK Invest said its base case forecasts that Tesla shares will be worth $7,000 by 2024, up from a previous forecast of $6,000. To get to that figure, ARK unsurprisingly makes some aggressive assumptions about Tesla’s financial future, such as that the company can expand its gross margins to 40%, about double its current level.