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Tesla Stock Gains Following Wall Street Upgrade and Price Target Lift

Tesla stock gains as Jefferies analysts upgrade their rating and price target on expectations the electric carmaker will be a mass-production EV leader and innovator.

Tesla  (TSLA) - Get Tesla Inc Report stock gained Monday after Jefferies analysts upgraded their rating on the stock, predicting the shares will rally 22% over the next 12 months as the electric carmaker continues to prove both a leader and innovator in the mass-production EV and battery market.

In a research note to clients, Jefferies analyst Philippe Houchois and his team upgraded Tesla to buy from neutral and raised their one-year price target to $850 from $700 on expectations that carmakers in general will be able to boost their margins as they operate with less but better-allocated capital.

Specific to Tesla, Houchois and his group said they expect the electric car pioneer led by CEO Elon Musk to benefit over others that are also steering into the EV game from a “lack of legacy issues,” and as demand for electric vehicles continues to accelerate.

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Rebuilding dealer inventories will be the first test for the companies, with lower product complexity and higher direct-selling the future drivers for structurally better industry returns, Houchois and his research team wrote.

For other automakers, however, the outlook appears less rosy. The investment bank cut its rating on Daimler  (DAIMF) to hold and lowered its price target to €82 from €95, noting that while they like the company's EV transformation trajectory, the upside for now appears limited.

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Houchois's team also cut their price target on General Motors  (GM) - Get General Motors Company (GM) Report to $53 from $68, noting the American car and truck maker’s 2022 product cycle appears weak compared with rivals Ford  (F) - Get Ford Motor Company Report and Stellantis  (STLA) - Get Stellantis NV Report.

Meantime, Tesla reportedly has told workers at its Nevada battery factory that they will be required to wear a mask indoors starting Monday regardless of vaccination status, joining the growing number of companies with such mandates as COVID-19 cases rise.

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The company cited the spread of the highly contagious Delta variant of the virus and updated guidance from the Centers for Disease Control and Prevention in its policy change. The Nevada government has said it may impose a mask mandate this week in the county where Tesla's factory is located if transmission rates don't improve.

At last check, shares of Tesla were up 2.53% at $716.80. The stock has fallen 4.2% year to date. Shares of General Motors were down 2.88% at $53.46; shares of Ford were down 1.6% at $13.57.